United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Argued May 12, 2006

Decided May 2, 2007

Before

Hon. DANIEL A. MANION, Circuit Judge

Hon. MICHAEL S. KANNE, Circuit Judge

Hon. ILANA DIAMOND ROVNER, Circuit Judge

No. 05-4263

AUTOMATED SOLUTIONS CORP.,

Plaintiff-Appellee,

v.

PARAGON DATA SYSTEMS, INC.,

Defendant-Appellant.

Appeal from the United States District

Court for the Northern District

of Illinois, Eastern Division.

No. 05 C 4429

Elaine E. Bucklo, 

Judge.

O R D E R

The parties are before the court on an appeal of a decision by the district court to

quash a subpoena. We remanded the case to the district court so that the court could

provide an explanation for her decision in accordance with Circuit Rule 50. The district

court provided an explanation on September 28, 2006. We invited the parties to submit

supplemental briefs.

The parties have been engaged in two lawsuits in Ohio for a number of years. In

Automated Solutions Corp. v. Paragon Data Sys., Inc., 856 N.E.2d 1008 (Oh. Ct. App.

2006), the Ohio Court of Appeals affirmed the state trial court’s judgment in favor of

Automated Solutions Corp. (ASC) on questions of breach of contract and ownership of

the software at issue in that case. The Ohio Supreme Court declined to hear an appeal

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

 Fed. R. App. P. 32.1
No. 05-4263 Page 2

of that decision. Automated Solutions Corp. v. Paragon Data Sys., Inc., 858 N.E.2d 818

(Oh. 2006). While the state court action was pending, the parties found themselves in

the United States District Court for the Northern District of Ohio, arguing questions

of copyright. Pursuant to that federal case, Paragon sought to subpoena from the

Chicago Tribune Company any software sold or provided by ASC and any documents

in the Tribune’s possession related to that software. ASC moved the district court to

quash the subpoena and issue a protective order. The district court granted ASC’s

motion on October 7, 2005, and has since explained her reasoning as follows:

I concluded that the subpoena sought documents that did not bear a

reasonable nexus to the lawsuit brought by Automated against Paragon

in Ohio. The software sold by Automated to the Tribune is not an issue

in the case. The case concerns the allegations that certain software sold

by Paragon was improperly copied and sold from Automated. Paragon’s

defense is that it independently developed the software that it was

selling. In response to the motion to quash, Paragon claimed that the

Tribune might have a copy of the original copyrighted version of the

software at issue, as well as documents related to the work’s

development. It did not explain how such documents could be at all

relevant to the lawsuit, and I concluded they were not. In addition, the

copyrighted version of the software is publicly available.

We review the district court’s decision to quash a subpoena for abuse of discretion.

Todd v. Merrell Dow Pharm., Inc., 942 F.2d 1173, 1178 (7th Cir. 1991). A district

court’s order limiting discovery constitutes an abuse of discretion only where: the

record contains no evidence upon which the court could have rationally based its

decision, the decision is based on an erroneous conclusion of law, the decision is based

on clearly erroneous factual findings, or the decision appears completely arbitrary.

Stagman v. Ryan, 176 F.3d 986, 993-94 (7th Cir. 1999). Paragon argues that the

district court’s decision was unsupported by any evidence, was based on an incorrect

conclusion of law, and was arbitrary. We disagree.

The Ohio federal lawsuit involves a claim of copyright infringement by ASC against

Paragon. Paragon has counterclaimed against ASC alleging that it has independently

developed another software program, distinct from the one that the Ohio state courts

have ruled belongs exclusively to ASC, and that ASC has committed a number of

common law torts by informing people that Paragon copied ASC’s software. The district

court had before it the complaint, answer, and counterclaims from the Ohio federal

lawsuit. It also had before it excerpts of the state proceedings and the copies of the

subpoenas that Paragon sought to serve on the Tribune.

The district court noted that the record shows that the competing software

programs that are the subject of the litigation are publicly available. Like the district

court, we are at a loss to see how the Tribune’s software could possibly be relevant to
No. 05-4263 Page 3

this lawsuit. See Fed. R. Civ P. 26(b)(1) (limiting discovery to “any matter, not

privileged, that is relevant to the claim or defense of any party . . . [but] need not be

admissible at trial if the discovery appears reasonably calculated to lead to the

discovery of admissible evidence.”). Paragon does not claim that the Tribune is in

possession of any software that Paragon independently developed. The question of the

ownership of the software in use by the Tribune was decided by the Ohio state courts.

Nor does Paragon claim that the Tribune is in possession of any software that ASC

might have illegally derived from Paragon’s independently developed software. Given

that the record contained ample evidence of the scope of the Ohio lawsuits, the district

court’s entry of September 28, 2006 makes it clear that the court correctly considered

the evidence about the scope of the lawsuit, the items sought from the Tribune, and the

nexus between the two. There was adequate evidence in the record to support the

district court’s decision.

Because the district court’s decision is supported by evidence in the record, did not

make any erroneous conclusions of law, and was not arbitrary, we AFFIRM the

decision of the district court to quash the subpoena.