Jason YAMADA, D.D.S. etc., et al., Plaintiffs, v. NOBEL BIOCARE HOLDING AG, etc., Defendants No. CV 10-4849-JHN (PLAx) United States District Court, C.D. California, Western Division Signed May 12, 2011 Counsel Jason E. Ochs, Clapp Occhs PC, Irvine, CA, Ramon R. Lopez, Lopez McHugh LLP, Newport Beach, CA, Stephen D. Ochs, Pro Hac Vice, Stephen D. Ochs MD JD, Missoula, MT, Sean Clinton Woods, Jason T. Baker, Jonas Palmer Mann, William M. Audet, Audet and Partners LLP, San Francisco, CA, for Jason Yamada, D.D.S. etc., et al. Eric Y. Kizirian, Lewis Brisbois Bisgaard and Smith LLP, Roy M. Brisbois, wis Brisbois Bisgaard and Smith, Los Angeles, CA, for Nobel Biocare Holding AG, etc. Abrams, Paul L., United States Magistrate Judge ORDER RE: PLAINTIFF'S MOTION RE: DISCOVERY DISPUTES *1 Plaintiff in this action[1] claims a design defect in defendants' dental implant. Plaintiff has filed a Motion in which it seeks to compel various types of discovery from defendants. The Court has concluded that oral argument will not be of material assistance in determining plaintiff's Motion. Accordingly, the hearing scheduled for May 24, 2011, is ordered off calendar (see Local Rule 7-15). A. Custodial Files Plaintiff provided defendants with the names of ten current and former employees of defendants, from whom plaintiff sought custodial files, including electronically stored information (“ESI”). The files would be derived from 49 search terms provided by plaintiff. Two files have been produced; eight have not. Defendants have not provided a date certain by which the other files will be produced, despite plaintiff agreeing to “generous ‘claw-back’ provisions.” Plaintiff complains that the layers of attorney review of each document employed by defendants for relevance and privilege have “profoundly delayed production.” He further is “perplexed” that the file of Milker Nilsson (one of the two produced files) lacked any documents from 2003 through 2005, a time period critical to this action. In light of delays in producing the two files, plaintiff fears “significant delays” in production of the eight remaining files and therefore seeks an order that production occur within one week of the hearing on this Motion, i.e., by May 31, 2011. Defendants counter that any delay is a result of the overbroad and irrelevant search terms insisted on by plaintiff. They represent that they stipulated to collect and review the ESI for the first two custodial files, with the rest occurring after the hearing on plaintiff's class certification motion (originally set for March 28, 2011); that just 1% of documents for one file and 6% of documents from the other file that generated “hits” using plaintiff's search terms were responsive and were produced; and that using plaintiff's search terms, 80,000 documents have been identified that need review. Two levels of review—first by contract attorneys hired to review documents, and then a second review—are necessary to ensure that trade secrets or irrelevant information are not disseminated. Defendants anticipate that ten weeks will be needed for the contract attorneys to complete their review, and a few weeks beyond that will be necessary for the second level of review, i.e., production cannot occur until June 30, 2011. No discovery deadline or trial date yet exist. The motion for class certification has been briefed and is under submission. Plaintiff does not dispute that no discovery deadline currently exists, and that a trial date has yet to be set, and it appears that dates will not be set by the District Judge until after a ruling on the class certification has issued. See Docket Entry No. 37. In these circumstances, the Court finds the production schedule proposed by defendants to be reasonable, in light of the number of search terms to be employed and the number of documents to be reviewed based on the “hits” generated by those terms. Accordingly, defendants are ordered to produce responsive documents, including ESI, no later than June 30, 2011. B. Machine Tolerances *2 Plaintiff contends that the machine tolerances for defendants' dental implant will enable expert engineers to determine whether a design defect exists, and relates to defendants' failure to warn claim. He contends that the tolerances are not trade secrets, but even if they are, the protective order entered in this matter will prevent any harm from disclosure. Defendants offered to let plaintiff choose five sizes of defendants' implant from a list of 45 different sizes, with an “attorney's-eyes only” provision as to the production. Plaintiff asserts this is insufficient, as he should not have to guess which sizes to select since he is entitled to review all such documents. Defendants counter that their implant is “a single type of implant that is available in 45 different dimensions” (Joint Stipulation, at 14), and that the machine tolerances “are the only portion of the roadmap [for creating the implant] which cannot be garnered by reverse engineering or a direct analysis... of the implant by third parties.” Declaration of Steven Hurson in opposition to Motion, ¶ 2. The machine tolerances are “the onlyinformation that prohibits third parties... from making an exact replica of the implant” and, if they became public knowledge, defendants' products would diminish in value. The machine tolerances are one of the company's “most closely guarded trade secrets.” Defendants further represent that the machine tolerances “have no bearing on whether an implant can withstand certain pressures and/or on how the implant will perform after placement.” Hurson Dec., ¶¶ 3-6. Under Fed.R.Civ.P. 26(b)(1), discovery is permitted of “any nonprivileged matter that is relevant to any party's claim or defense.” As a general matter, Federal Rule of Civil Procedure 26(b) is to be “liberally interpreted to permit wide-ranging discovery of information,” even if that information is not ultimately admitted at trial. SeeComcast of Los Angeles, Inc. v. Top End International, Inc., 2003 WL 22251149, at *2 (C.D. Cal. July 2, 2003); see also Fed.R.Civ.P. 26(b)(1) (“[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”). The burden is on defendants to show that discovery should not be allowed (Comcast, at *2, citing Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975)); it is not up to defendants to decide what plaintiff needs to pursue this action. However, the Court may issue a protective order limiting disclosure of trade secrets “or other confidential research, development or commercial information.” Fed.R.Civ.P. 26(c)(1)(G). It is the disclosing party's burden to show that the information is in fact a trade secret or other confidential information under Rule 26(c)(1)(G), and that its disclosure would be harmful to their interest in the property. In re “Agent Orange” Product Liability Litigation, 104 F.R.D. 559, 574 (E.D.N.Y. 1985), aff'd., 821 F.2d 139 (2d Cir.), cert. denied, 484 U.S. 953 (1987); Centurion Industries, Inc., v. Warren Steurer and Assocs., 665 F.2d 323, 326 (10th Cir. 1981). The burden then shifts to the other party to show that the information being sought is relevant to its claims and/or defenses, and is necessary to prepare the case for trial. In re Remington Arms Co., Inc., 952 F.2d 1029, 1032-33 (8th Cir. 1991); Wagner v. Dryvit Systems, Inc., 208 F.R.D. 606, 612 (D. Neb. 2001). When trade secrets are at issue, the Court is required to balance the risk of disclosure to competitors against the risk that a protective order will impair prosecution of the action. Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.), cert. denied, 506 U.S. 869 (1992). *3 The Court finds that the machine tolerances for the implant are the sort of confidential commercial information that, in the circumstances presented here, is appropriately subject to a protective order, and that defendants have shown good cause for the entry of such an order. Courts have given protection to similar materials, and can properly protect parties from disclosure of information that could harm future business positions. See, e.g., Duplan Corp. v. Deering Milliken, Inc., 397 F.Supp. 1146, 1186 (D.S.C. 1974) (confidential business matters involving names of licensees and royalties collected are trade secrets entitled to protection under a protective order); Public Citizen Health Research Group v. National Institutes of Health, 209 F.Supp.2d 37, 46 (D.D.C. 2002); In re Adobe Systems, Inc. Securities Litigation, 141 F.R.D. 155, 162 (N.D. Cal. 1992). Defendants have sufficiently described the harm to be suffered if the machine tolerances are made known. Plaintiff at this point has not shown a need for the machine tolerances of all 45 sizes of the implant, or that limiting him to only a portion of the machine tolerances will impair his ability to pursue his claims. In fact, the main reasons asserted by plaintiff to obtain all of the machine tolerances is that they are relevant, he should not have to guess which sizes to choose, and that the addition to the Protective Order of an “attorney's eyes only” designation will safeguard the information. In balancing the risk of the possible inadvertent disclosure to competitors of information defendants treats as (and the Court finds to be) confidential against the risk that limiting production to only some of the machine tolerances may impair plaintiff's prosecution of this action (seeBrown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.), cert. denied, 506 U.S. 869 (1992)), the Court concludes that limited production is warranted. Accordingly, defendants must provide plaintiff with a list of the 45 sizes, from which plaintiff may select nine for production (i.e., 20% of the total) subject to the addition to the existing Protective Order of an “attorney's eyes only” designation, and upon defendants stating under penalty of perjury that they will not argue that the conclusion of plaintiff's experts are invalid based on the experts not analyzing all 45 sizes.[2] C. Privilege Logs Plaintiff complains that defendants have not submitted a privilege log in spite of withholding from production numerous documents based on the attorney-client privilege and/or the work product doctrine. Defendants represented to plaintiff that the logs would be produced on April 18, 2011, but then advised that they would produce a log only for paper documents, not as to the ESI documents. According to plaintiff, while defendants indicate that they will eventually produce a full privilege log, they have given no deadline for production. Defendants represent that they have produced a privilege log as to those paper documents that have been produced, and, as of April 18, 2011, they anticipated completing a log as to ESI within 10-14 days, i.e., by May 2, 2011.[3] In light of the time allowed herein to defendants to produce the remaining custodial files, the Court orders that a detailed privilege log concerning all discovery also be provided no later than June 30, 2011. D. Milker Nilsson Documents *4 Plaintiff's counsel was advised by defendants that there were no documents for the period between 2003 and 2005, that they had not been able to identify a reason why those documents are no longer available, and that they are working with a forensic consultant to help identify when those documents became unavailable and under what circumstances. Plaintiff contends that “absolutely nothing has been done forensically to discover[ ] the absent material.” Joint Stipulation, at 20 (emphasis in original). Plaintiff thus seeks an order that defendants turn over a full forensic computer accounting regarding the missing documents within five days of the hearing on this Motion, and that plaintiff be given the option of having their own expert perform a forensic accounting. Defendants relate that the Nilsson ESI was likely deleted during a service provider change prior to the filing of this action, that the work of their forensic consultant concerning the missing Milker Nilsson documents is “ongoing,” and that they would share the results of this investigation “as soon as it is complete.” Declaration of Eric Y. Kizirian in opposition to Motion, ¶ 7. They anticipate completion by May 20, 2011. Joint Stipulation, at 21. The Court will allow them to complete their investigation, and produce the results to plaintiff. Plaintiff at this stage will not be permitted access to defendants' computers where, as here, defendants are actively seeking to provide answers to the missing ESI, and no evidence of deception or wrongdoing exists. CONCLUSION Plaintiffs Motion is granted in part and denied in part as set forth above. No later than May 20, 2011, defendants shall provide plaintiff with the results of their forensic consultant(s) concerning the Milker Nilsson documents. Production of the machine tolerances for the nine sizes to be selected by plaintiff shall occur no later than May 27, 2011.[4] No later than June 30, 2011, defendants shall produce all responsive custodial file documents, a detailed privilege log of all documents being withheld based on the attorney-client privilege and/or the work product doctrine, and the required declaration. IT IS SO ORDERED. Footnotes [1] A motion seeking to certify this case as a class action is currently under submission with the District Judge. [2] If plaintiff's experts determine, following examination of the 9 sizes to be produced, that additional sizes are required to properly analyze the implant, plaintiff may renew his motion in this regard. [3] It appears that the privilege log to be produced by May 2, 2011, relates to the two custodial files discussed above, not all ESI. Defendants indicate that if plaintiff desires a privilege log at the time of document production, production will be delayed even further. [4] To the extent defendants seek to designate the machine tolerances as confidential—“attorney's eyes only,” the parties shall submit a stipulation modifying the Protective Order, or a supplemental Protective Order, no later than May 20, 2011.