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Timestamp: 2019-04-25 20:43:52+00:00

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FindACase | Mosaic Potash Carlsbad, Inc. v. Intrepid Potash, Inc.
Mosaic Potash Carlsbad, Inc. v. Intrepid Potash, Inc.
MOSAIC POTASH CARLSBAD, INC., Counter-defendant.
THIS MATTER is before the Court on Plaintiffs Motion for Protective Order from Plant Inspection [Doc. 71], filed on April 6, 2018. Defendants Intrepid Potash, Inc. and Intrepid Potash-New Mexico, LLC ("Defendants") responded on April 18, 2018. [Doc. 82]. Plaintiff replied on May 2, 2018. [Doc. 88]. Having considered the briefing, relevant portions of the record, and relevant authorities, and being otherwise fully advised in the premises, the Court finds that Plaintiffs motion is well-taken and will be GRANTED.
Plaintiff and Defendants are competitors. They both operate langbeinite processing facilities outside of Carlsbad, New Mexico. [Doc. 66]at 4, 6. Langbeinite is a mineral from which agricultural fertilizers are produced. Id. at 5. Plaintiff claims that Defendants misappropriated Plaintiffs trade secrets and other confidential information concerning langbeinite processing and granulation.
Plaintiff alleges that in November 2014, Defendant Steve Gamble, its long-time head of research and development, accepted employment with Defendants without its knowledge. Id. at 12-15. Plaintiff alleges that before leaving, Defendant Gamble copied hundreds of confidential files to use in his new position. Id. Once Defendant Gamble began his employment with Defendants, Plaintiff alleges, he shared trade secrets to improve their operations. Defendant Gamble, who had been intimately involved in the design of Plaintiff s plants, allegedly made recommendations to Defendants as to how to re-design their facility to improve its efficiency. Id. at 18. To that point, Plaintiff claims it had enjoyed a "distinct and significant competitive advantage" over Defendants, recovering approximately 80% of the langbeinite it mined compared with Defendants' 30%, as a result of its trade secret methods for langbeinite processing and granulation. Id. at 6, 21. Plaintiff claims that Defendants did then re-design their processing facility and change their granulation formula. As a result, they improved their langbeinite production and recovery. Defendants' rapid success allegedly followed years of attempts-and millions of dollars in investments-to improve its langbeinite recovery, without success. See Id. at 18-20.
In 2015, Plaintiff filed suit in state court for trade secrets misappropriation, identifying several related causes of action based on these allegations. It subsequently initiated a second suit in federal court in this District. The first case was removed to federal court, and the two cases were consolidated into the present action. See [Doc. 54].
On March 14, 2018, Plaintiff served Defendants with a notice of inspection of their facilities. [Doc. 71] at 7; [Doc. 75]. Two days later, Defendants served Plaintiff with a reciprocal notice of inspection. [Doc. 71] at 7; [Doc. 63]. On April 6, 2018, Plaintiff filed the instant motion for a protective order to prevent Defendants from inspecting its facilities. Plaintiff argues that inspection of its facilities is not designed to obtain relevant information, namely because whether or not Plaintiff is actually using its own trade secrets is immaterial to its claims. [Doc. 71] at 8-12. Plaintiff additionally argues that inspection is not proportional to the needs of the case. Id. at 12-15. Finally, Plaintiff asserts that Defendants made their inspection request only because Plaintiff itself requested an inspection. This "retaliatory" reciprocal request was improper, Plaintiff contends. Id. at 15-16.
Defendants contend that inspection of Plaintiff s plant would yield relevant information and is otherwise proportional to the needs of the case. [Doc. 82]. In the main, Defendants argue that inspection is necessary so they can better understand the trade secrets at issue in this lawsuit. Id. at 4, 7-9. While Plaintiff has provided answers to interrogatories purporting to describe its trade secrets, Defendants contend they remain unclear. Id. at 7-8. Defendants further argue that inspection is necessary to determine "the extent to which the processes are or are not protected from public disclosure." Id. at 2. They argue that the attorneys' eyes only procedures provided for in the parties' protective order will alleviate any concern about new or further exposure of Plaintiffs trade secrets.
The proper scope of discovery is "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); see also Sanchez v. Matta, 229 F.R.D. 649, 654 (D.N.M. 2004) ("The federal courts have held that the scope of discovery should be broadly and liberally construed to achieve full disclosure of all potentially relevant information."). Whether requested discovery is proportional depends on "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." Fed.R.Civ.P. 26(b)(1). Though broad, the scope of discovery "is not without limits and the trial court is given wide discretion in balancing the needs and rights of both plaintiff and defendant." Gomez v. Martin Marietta Corp., 50 F.3d 1511, 1520 (10th Cir. 1995) (internal quotation marks omitted). The Rules expressly permit inspection into premises, so long as the request comes within the scope of Rule 26(b). See Fed. R. Civ. P. 34(a).
Rule 26(c) provides that, upon a showing of good cause, a court may "issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, " which order may include forbidding disclosure or discovery. Fed.R.Civ.P. 26(c)(1)(A). The district court has "broad discretion to decide when a protective order is appropriate and what degree of protection is required." Layne Christensen Co. v. Purolite Co., 271 F.R.D. 240, 244 (D. Kan. 2010) (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)); see also Miller v. Regents of the Univ. of Colo., 188 F.3d 518, 1999 WL 506520, at *12 (10th Cir. 1999) (unpublished table decision) (reasoning that "[t]he district court is in the best position to weigh these variables and determine the appropriate limits because, unlike an appellate court, the district court has the ability to view firsthand the progression of the case, the litigants, and the impact of discovery on parties and nonparties"). The party seeking the protective order has the burden to show that good cause exists for the protective order. Velasquez v. Frontier Med. Inc., 229 F.R.D. 197, 200 (D.N.M. 2005).
The Court finds that Plaintiff has shown good cause for a protective order preventing Defendants from inspecting its facilities.

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