WHITE CAP, LP, PLAINTIFF, v. DANIEL MCSPADDEN, RONALD NELSON, PHIL SCHROEDER, AND SOUTHERNCARLSON, INC., DEFENDANTS CASE NO. 3:23-CV-2001-N United States District Court, N.D. Texas, Dallas Division Filed July 12, 2024 Toliver, Renee H., United States Magistrate Judge ORDER *1 Pursuant to 28 U.S.C. § 636(b) and the district judge's Order of Reference, Doc. 66, this cause is before the undersigned for a ruling on Plaintiff White Cap, L.P.'s Motion to Reconsider the Court's Order on Plaintiff's Motion for Production of Non-Privileged Files, Doc. 126. For the reasons detailed herein, Plaintiff's motion is GRANTED. I. PROCEDURAL HISTORY Per the operative complaint, Plaintiff is primarily engaged in the business of marketing, selling, and distributing supplies and equipment and related services for professional contractors. Doc. 128 at 6. For a time, Plaintiff employed Defendants Nelson, McSpadden, and Schroeder (the “Individual Defendants”) but they ultimately decided to work for one of Plaintiff's competitors, Defendant SouthernCarlson, Inc. (“SCI” and, collectively, “Defendants”). Doc. 128 at 10-11. Plaintiff alleges that Defendants poached its clients and employees and are using confidential information stolen from Plaintiff to harm its business. Doc. 128, passim. Accordingly, Plaintiff brought suit against Defendants under the federal Defend Trade Secrets Act and the Texas Uniform Trade Secret Act in addition to claims for (1) tortious interference with contractual relations (against SCI); (2) breach of fiduciary duty and duty of loyalty (against the Individual Defendants); (3) tortious interference with prospective business relations (against Defendants); (4) violation of the federal Computer Fraud and Abuse Act (against McSpadden); (5) aiding and abetting a breach of fiduciary duty and duty of loyalty (against Defendants); (6) violation of Tex. Civ. Prac. & Rem. Code § 143.001 (against the Individual Defendants for “harmful access by computer”); (7) civil conspiracy (against Defendants); and (8) unfair competition (against Defendants). Doc. 128 at 26-43. Plaintiff seeks damages as well as injunctive relief. Doc. 128 at 43-45. Following expedited briefing, the district judge denied Plaintiff's motion for a temporary restraining order and directed the parties to confer regarding an expedited discovery schedule, including the “staged filing of evidence, identification of and limitations on the number of affiants/declarants, and briefing.” Doc. 23 at 2. On receipt of the parties' proposal, the district judge entered a Scheduling Order for Expedited Discovery and Preliminary Injunction Briefing, directing discovery to commence immediately and establishing briefing deadlines. Doc. 34 at 1-2. The Court then ordered the parties to confer about a forensic review protocol and, if no agreement was reached, present their respective proposals, which they did. Doc. 34 at 3. On November 7, 2023, the Court entered a Stipulated Order Regarding Protocol for Forensic Inspections of Individual Defendants' Devices and Accounts (the “Protocol Order”). Doc. 51; Doc. 52. As relevant here, the Protocol Order required the Individual Defendants to deliver their respective “Repositories”[1] to a forensic examiner to “make forensically sound images and collections of the Repositories and Media (the “Images”) using industry-standard tools and methods, and perform all analyses using the Images.” Doc. 52 at 5. Following the creation of the Images, the examiner was to apply specified search terms to the file content, and Plaintiff was also directed to provide the examiner with a list of hash values for known files. Doc. 52 at 6. *2 The Protocol Order then required the examiner to generate a report identifying (1) hit counts for each search, (2) any files that failed to fully process, and (3) tabular metadata and hash values for all files that hit on any of the designated search terms and which search terms each file was responsive to. Doc. 52 at 6-7. The resulting reports and data were then to be provided to Defendants so they could determine whether any information should be withheld or redacted based on privilege or privacy concerns. Doc. 52 at 7. Once the “forensic information or reports“ were provided to Plaintiff, Defendants would serve a log adequate to support any assertions of privacy, confidentiality, or privilege. Doc. 52 at 7. The Protocol Order further specifies that “[n]othing in this Order shall be understood as permitting White Cap to review the substantive files identified by the Examiner (defined below).” Doc. 52 at 2. A dispute arose between the parties, however, after the examiner circulated his search term report which showed potential information of Plaintiff's on the Devices. Plaintiff thereafter requested that the examiner send Plaintiff “all of the files that Defendants reviewed, aside from the ones they marked as privileged.”[2] Doc. 98 at 6; Doc. 98-1 at 11. Defendants, however, instructed the examiner not to provide the non-privileged files to Plaintiff. Doc. 98 at 7; Doc. 98-1 at 9-10. Plaintiff then moved to compel production of the non-privileged files directly from the examiner, contending that it could not identify its information on the Devices and prepare for a preliminary injunction hearing without them. Doc. 85 at 1, 3-6. The Court denied the motion, concluding that (1) under the Protocol Order, neither of the parties were permitted to review the substantive files identified by the examiner and (2) in any event, the examiner's search term report contained hash values for every file, which Plaintiff could cross-reference with its own list to identify the files listed in the examiner's report. Doc. 120 at 4-5 (the “May Order”). Plaintiff now moves for reconsideration of the May Order. Doc. 126, passim. II. APPLICABLE LAW “Rule 54(b) allows parties to seek reconsideration of interlocutory orders and authorizes the district court to revise at any time any order or other decision that does not end the action.” Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (cleaned up) (quoting FED. R. CIV. P. 54(b)). The district court may thus “reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Id. (citation omitted). “Although the precise standard for evaluating a motion to reconsider under Rule 54(b) is unclear, whether to grant such a motion rests within the discretion of the court.” Dos Santos v. Bell Helicopter Textron, Inc. Dist., 651 F.Supp.2d 550, 553 (N.D. Tex. 2009) (citation omitted). III. ANALYSIS In seeking reconsideration of the May Order, Plaintiff argues that Defendants misled the undersigned into believing that (1) they had not obtained and reviewed the substantive files themselves; (2) the examiner's search term report had hash values for every file; and (3) the Protocol Order required Defendants to conduct their withholding review based solely on the examiner's search term report and not the underlying files themselves. Doc. 126 at 6-9. Accordingly, Plaintiff requests that the Court “reconsider its order and direct the Forensic Examiner to provide White Cap all files/information that Defendants did not list on their withholding log.” Doc. 126 at 6. Defendants respond that regardless of Plaintiff's claimed misrepresentations, the plain language of the Protocol Order states that “Nothing in this Order shall be understood as permitting White Cap to review the substantive files identified by the Examiner (defined below).” Doc. 132 at 4. Moreover, Defendants argue that to the extent the Protocol Order and Plaintiff's requests for production overlapped, they have already produced all responsive documents, and Plaintiff is not entitled to production of the non-privileged files directly from the examiner. Doc. 132 at 6-7. *3 The parties agree on one thing, namely that Defendants did review the substantive files—a fact of which the Court was not aware at the time the May Order was entered. Doc. 126 at 2; Doc. 132 at 8-9. Moreover, the parties continue to dispute the extent to which Plaintiff's hash values can be effectively cross-referenced. See Doc. 132 at 9-12; Doc. 139 at 5-6. Under the circumstances, the Court agrees that reconsideration is warranted for the reasons Plaintiff urges and in the interests of justice and judicial economy. As to the latter, the Court concludes that modification of the Protocol Order to permit Plaintiff's review of the non-privileged files is warranted, to the extent the protocol conflicts with the directives and purpose of the Scheduling Order for Expedited Discovery and Preliminary Injunction Briefing that discovery to commence immediately. Doc. 34 at 1-2. See also FED. R. CIV. P. 1 (providing that the rules of procedure “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.”). “It is within the sound discretion of the district judge to make any discovery order that is not barred by higher authority.” United States v. Campagnuolo, 592 F.2d 852, 857-58 n.2 (5th Cir. 1979); see also In re Stone, 986 F.2d 898, 902 (5th Cir. 1993) (noting that the court's inherent powers include “those reasonably useful to achieve justice” and recognizing several categories of inherent court powers) (citation omitted). Indeed, “federal courts are vested with certain inherent discovery powers owing to the equitable power of Chancery courts to issue bills of discovery.” Nat. Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d 1397, 1409 (5th Cir. 1993). Moreover, as another circuit court found, “it seems very reasonable to suppose that a court has inherent power to compel a party to produce, without the issuance of a subpoena, documentary evidence within his control and known to be relevant.” Producers Releasing Corp. de Cuba v. PRC Pictures, Inc., 176 F.2d 93, 95 (2d Cir. 1949); see also Nat. Gas Pipeline Co. of Am., 2 F.3d at 1409 n.34 (5th Cir. 1993) (“A court might well have inherent power to order a party to produce pertinent documents.”); Clear v. JPMorgan Chase Bank, N.A., 491 F. Supp. 3d 207, 218 (N.D. Tex. 2020) (“Courts possess the inherent power to protect the efficient and orderly administration of justice and to command respect for the court's orders, judgments, procedures, and authority.”) (cleaned up) (quoting In re Stone, 986 F.2d at 902); Mayfield-George v. Texas Rehab. Commn., 197 F.R.D. 280, 283-84 (N.D. Tex. 2000) (noting that “federal courts have inherent power to issue bills of discovery”). In light of the new information that has come to light since entry of the May Order, the Court finds that the interests of justice require that Defendants provide the non-privileged files to Plaintiff. FED. R. CIV. P. 1; Austin, 864 F.3d at 336. Defendants cannot plausibly argue that they will suffer any prejudice or harm if Plaintiff is permitted to see its own documents, aside from the obvious fact that disclosure of the non-privileged files may harm their own case. That is insufficient. IV. CONCLUSION For the foregoing reasons, Plaintiff White Cap, L.P.'s Motion to Reconsider the Court's Order on Plaintiff's Motion for Production of Non-Privileged Files, Doc. 126, is GRANTED. The forensic examiner is ORDERED to produce the non-privileged files to Plaintiff within 14 days of the date of this order. Plaintiff is directed to provide a copy of this order forthwith to Charles River Associates, the forensic examiner employed in this case, and to provide recompense to the forensic examiner of any additional costs incurred in complying with the directive herein. *4 SO ORDERED on July 12, 2024. Footnotes [1] The Protocol Order defines “Repositories” as “devices that the Individual Defendants may have used to store information or communicate relating to their work for White Cap, or that contain or potentially may contain White Cap Information.” Doc. 52 at 3. The Court substitutes “Devices” for “Repositories” here. [2] For purposes of this Order, the Court will refer to the documents Defendants did not designate as private, confidential, or privileged as the “non-privileged files.”