Engineered Tax Services, Inc. v. Scarpello Consulting, Inc., No. 9:2016cv81795 - Document 91 (S.D. Fla. 2018)
Court Description: ORDER denying 69 Plaintiff's Second Motion to Compel Production of Documents. Signed by Magistrate Judge William Matthewman on 2/6/2018. (kza)
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Engineered Tax Services, Inc. v. Scarpello Consulting, Inc. Doc. 91 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE N O .I6-BI79S-CV -M A RR A/M A TTHEW M AN ENGINEERED TAX SERVICES,lN C., Plaintiff, D lL.EL1L' é l' V S. D'P w,i FEB 26 2218 l SCARPELLO CON SULTING,INC., STEVE).1M .I-ARlVORE CL.EF(/.U.S;D1E4r 0.T. S.t').Orf'î1h.-y .t.Pl! .. i i Defendant. / ORDER DENYING PLAINTIFF'S SECOND M O TION TO COM PEL PRO DUCTION OF DO CUM ENTS IDE 691 THIS CAUSE isbeforetheCourtupon Plaintiff,Engineered Tax Services,Inc.'sSecond Motion to Compel Production of Documents gDE 691. This matter was referred to the undersigned upon an O rder referring all discovery m atters to the undersigned for appropriate disposition.See DE 29.Defendantfiled aResponseto the Motion (DE 721.ThisCourtentered an Ordersetting ahearing on PlaintiffsSecond M otion to Compel(DE 751,and subsequently entered an Orderadding two additionalmotions (DE 73,DE 771to the hearing (DE 801.The Courtheld a hearing on the m otions on November 15,2017.The Courtdenied Defendant's M otion forProtective OrdergDE 73)asmootand denied Plaintiffs Motion forSanctionsfor FailuretoAppearataProperlyNoticedDeposition (DE 771.TheCourtdid notdecidePlaintiffs Second Motion to Compel (DE 691, and ordered the parties to each file a supplemental memorandum by December 7, 2017 at 5:00 p.m . The mem oranda were intended to solely address the m otion to com pel D efendant's custom er list, and specifically,w hether the Court should order a) produdion ofthe customer listin its entirety,b)a particular subsetofthe Dockets.Justia.com customer list,or c) whether no further portion of the customer list other than what was previously produced by Defendant should be ordered produced.Further,the parties were to discusswhether,ifthem otion to compelisgranted to any extent,the Plaintiffshallbepennitted to contactthe listed custom ers in orderto seek evidence ofa likelihood ofconfusion,oractual confusion,asto the disputed m ark.Defendanttled its Supplem entalBriefin Opposition to the Second M otion to Compel.gDE 881.Plaintifffiled itsM emorandum in SupportofitsM otion to CompelDefendanttoProduceCustomerList.(DE 892.Thematterisnow ripeforreview. 1. BA C K G R O U N D Plaintiff, Engineered Tax Services,lnc.has asserted claim s for tradem ark infringement, initialinterestconfusion,dilution,unfaircom petition,false designation oforigin,comm on 1aw trespassto chattels,deceptiveunfairtradepracticesand conunon 1aw unjustenrichmentagainst Defendant, Scarpello Consulting, Inc., because of Defendant's alleged use of the name CtEngineered Tax Services''in connection with the sale,advertisem ent,and Defendant'soffering ofservicesidenticalto thoseofPlaintiffwithoutPlaintiffsauthorization.(DE 1).The alleged infringem entisDefendant'suse ofthephrase,fsEngineered Tax Services''asa GoogleAdW ord. gDE 72,pg.31.A Google AdW ord is a word that,when searched on Google,produces Defendant's paid advertisement as a search result. 1d. Upon discovery, Plaintiff m ade the follow ing RequestforProduction to D efendant: RequestNo.3:$1All documents sufficient to identify all Defendant's customers since 2014fora11servicesprovidedbyDefendant.''gDE 69,pg.2). Defendantobjedsto thisrequestSûasbeing outside the scopeofpermissiblediscovery.'' 1d.Defendantalso objects because the Courthas already heard the issue in Plaintiffs tirst M otion to Com pel,and D efendantalleges thatithas already produced the çûonly custom ers w ho could potentially have viewed the Google Ad cam paign in dispute in thiscase.''1d.Defendant 2 also objects to the request by arguing that Plaintiff is attempting to obtain competitor information,which isnotrelevantorwithinthe scopeofdiscovery.Id. In itsM otion to Compel(DE 69j,Plaintiffallegesthattheproductionofthesedocuments is necessary in order to conduct a consumer survey regarding actual confusion due to the infringementalleged inthiscase.(DE 69,pg.3).Constlmersurveysareusedtoconvinceacourt that consumer confusion exists or does not exist between tradem arks, and provide direct evidence about consum er perceptions. Id. Plaintiff f'urther argues that the customer list is necessary in orderto refuteDefendant'sclaim thatthe trademarkhasnotm isdirected orconfused any consumerorpotentialcustomer.1d.PlaintiffrejectsDefendant'sclaim thatthe Courthad already determined this issue.Plaintiff claim sthatthe Courtordered Defendantto produce all docum entsconcem ing the yearly dollarvolume ofsales forservices during 2016 and 2017,as w ellas a1ldocum ents concerning D efendant's grossand netprofits from the sale ofD efendant's servicesduring 2016 and 2017, butthe Court'sOrderdid notconcern customerlists.(DE 69, pg.41.PlaintiffalsorejectsDefendant'sclaim thattherequestisan attemptto obtaincompetitor inform ation in discovery,because there is an expansive Protective Orderin place which would prohibittheclientorcompetitorfrom viewinghighly confidentialdocuments.(DE 69,pg.61. lnDefendant'sResponsegDE 721,Defendantallegesthatithasalreadyproduced alistof a1lcustom ers who had come to Scarpello Consulting through any online advertisement since April 1, 2014, which necessarily includes any custom ers that could have viewed the advertisement that Plaintiff alleges constitutes trademark infringement. (DE 72, pg. 31. D efendant asks the Court to lim it Plaintiff's discovery request to discovery of a list of online custom ers, w hich w as already produced to Plaintiff, because online custom ers are the only customerswho could have potentially seen thealleged infringement.gDE 72,pg.4).Defendant 3 arguesthata listofcustom erswho have no connection to the alleged infringing activity should be beyond the scope of discovery because the information pertaining to these custom ers is neitherrelevantto aclaim ordefensenorproportionalto theneedsofthiscase.(DE 72,pg.5j. Defendant adds that the Court has already denied Plaintiffs attempt to discover al1 of Defendant's sales inform ation,and instead only allowed discovery into the sales information pertainingto customerswhohad beenexposedtotheonline ad atissueinthiscase.(DE 72,pg. 61. II. TH E PA R TIES'SU PPLEM EN TA L M EM O M N D A The Courtheld a discovery hearing on Plaintiffs Second M otion to Compel (DE 691, Defendant'sM otion forProtectiveOrder(DE 731,andPlaintiffsM otion forSanctions(DE 77) on November 15,2017.The Courttook Plaintiffs Second M otion to Compel@DE 69)under advisement,and entered an OmnibusDiscovery Order(DE 871on November 17,2017,which resolved the other m otions,and further required the parties to file supplemental memoranda specificallyon theissue ofwhethertheCourtshould ordera)production ofthecustomerlistin itsentirety,b)asubsetofthecustomerlist,orc)whetherno furtherportion ofthecustomerlist otherthan whatw aspreviously produced by Defendantshould beproduced. On December 7,2017,Defendant filed its Supplemental Brief in Opposition to Second M otion to Compel.gDE 881.Defendant argues that the entirety of its customer listis not proportionalto the needs ofthis case,because alm ost a11ofDefendant's business is generated through referralsfrom established relationshipsand notthrough itsonlineadvertisements.(DE 88,pg.2).Further,Defendantallegesthattheonlyactofalleged infringementin thiscaseisthe use of the phrase ûlengineered tax services'' in a single paid G oogle advertisem ent, which is ctearly delineated as an advertisem ent if som eone searches for tdengineered tax services''using 4 Google.1d.Defendantalso arguesthatithasalready produced to Plaintiffa listofallcustomers, and corresponding sales/projectrevenues,in the relevanttime frame thatcame to Defendant through any online activity.1d.Defendant claim s ithas already produced the reportfrom its third-pm y online m arketing vendor listing the leads generated from the ad at issue. 1d. D efendantargues thatthe custom er listsoughtby D efendantdoesnotrelate to the calculation of dam ages.Finally,D efendant disputes Plaintiff s pum ose for seeking the custom er list,because itspurpose-tosurveythecustomersregardingactualconfusion-isimproper.(DE 88,pg.2q. On Decem ber 7,2017, Plaintiff filed its M em orandtlm in Support of M otion to Compel Production ofDocuments.(DE 691.Plaintiffarguesthatthe production ofthe customerlistis necessary because itwillbe used fora customersurvey.The customer survey is a method to demonstrate the existence of actual confusion, which is com pelling proof of likelihood of confusion.gDE 89,pg.4).Plaintiffclaimsthatthe information iscriticalto the issueofactual damages. Plaintiffalso arguesthatthe listwould notprejudice Defendantbecausetheparties enteredintoaStipulatedProtectiveOrder(DE 52),andthereforethelistwouldbeforattorney's eyesonly.gDE 89,pg.51.Plaintiffarguesthattheburdenwould beslighttoDefendant,because itsentirecustomerlistislessthan200clients.(DE 89,pg.61.Plaintiffclaimsthatthepurposeof the list, to survey clients,is permissible because Plaintiff will not m ake contact with any customerdirectly,butinstead willrely on an expertto use the custom erlistto tçneutrally gather and definethe relevantdem ographic''ofthe consum erin orderto gaugewho hasbeen m isled by thealleged infringement.(DE 89,pg.7j.Additionally,PlaintiffclaimsthatDefendantissimply trying to Sfcherry pick''w hich custom ers itw antsto produce and thatthis decision should notbe atthediscretion oftheDefendant.(DE 89,pg.8). 111. AN A LY SIS FederalRule ofCivilProcedure 37 allowsany party who seeksdiscovery to m oveforan ordercompelling production ifa party failsto produce documents as requested.Fed.R.Civ.P. 37.M otions to com peldiscovery are com m itted to the sound discretion of the trial court.See CommercialUnionlns.Co.v.Westrope,730 F.2d 729,731(11th Cir.1984).A partyisentitled to discovery regarding any non-privileged m atlerthatisrelevantto any party'sclaim ordefense andproportionaltotheneedsofthecase.Fed.R.Civ.P.26(b)(1).Rule26(b)allowsdiscovery dtthrough increased reliance on the com m onsense concept of proportionality.''In re: Takata Airbag Prod.Liab.Litig.,2016 W L 1460143,at*2 (S.D.Fla.M ar.1,2016)(quoting Chief Justice John Roberts,2015 Year-End Report on the Federal Judiciary 6(2015)). (çproportionality requires counsel and the court to consider whether relevant inform ation is discoverable in view ofthe needs ofthe case.''Tiger v.Dynamic Sports Nutrition,LLC,2016 W L 1408098,at*2(M .D.Fla.Apr.11,2016).Theparty whoresistsdiscoverybearstheburden ofshowing thegroundsforitsobjectionwithspecificity.Josephsv.HarrisCorp.677F.2d 985, 992 (3dCir.1982). Here,Plaintiffseeks û'alldocuments sufficient to identify a11ofDefendant's custom ers since2014 fora11servicesprovidedby Defendant.''(DE 69,pg.2).Asan initialmatter,several courts have held that custom er lists and related inform ation m ay,in a situation such as this, constitute protectable trade secrets under Florida law .Gibson v.ResortatParadise Lakes,LL C, No.8:16-CV-791-T-36AAS,2017W L 735457,at*1(M .D.Fla.Feb.24,2017)(citing Marine Turbo Engk,Ltd.v. Turbocharger Servs. Worldwide,LLC,No. 11-60621- CIV,2011 W L 6754058,at*9(S.D.Fla.2011);M errillLynch,Pierce,Fenner & Smith Inc.v.Dunn,191 F. Supp.2d 1346,1351(M .D.Fla.2002));SeeExchangelntern,Inc.v.Vacation Ownership Relief 6 6:10-cv-1273-Or1-35-DAB,2010 W L 4983669,at *5 (M .D.Fla.Oct.27,2010).However, Defendant'sobjectiontoPlaintiffsRequestforProduction doesnotallegethatitsCustomerList isaprotected trade secret.Instead,Defendantarguesthatthe docum entsrequested,which detail every custom er of Defendant for all of Defendant's services,is overly broad,irrelevant,and disproportionatetotheneedsofthiscase.TheCourtagreesand sustainsDefendant'sobjection. See Evans v.r' frAtlee Burpee Co.,No.15-61819-CV,2016 W L 3382347 (S.D.Fla.June 6, 2016);O' Boyle v.Sweetapple,No.14-81250-C1V,2016 W L 492655 (S.D.Fla.Feb.8,2016) (Informationsoughtindiscoverywasdisproportionateandirrelevantandwouldcausetheparties to nm down a rabbithole chasing irrelevant information on collateralm atters,resulting in the needlessandwastefulexpenditureoftimeandmoneybyboth parties). The only actoftrademark infringem entalleged in this case concerns Defendant'suse of the phrase Stengineered tax services'' as a G oogle A dW ord. How ever, Plaintiff is seeking documents which identify allofDefendant's custom ers forallservicesprovided by Defendant. Such a request is overbroad and disproportionate under the facts of this case.D efendantpoints outthatalmostallof its business is generated through referrals from established relationships and notthrough online advertisements.Plaintiffclaim sthatitneedsthe identitiesofeach ofthe 200 custom ersin orderto conducta custom erstlrvey,the purposeofwhich isto dem onstrate the existence of actual confusion in this case.However,there is no evidence or infonnation that custom ers w ho purchased services from D efendantvia referrals or through m ethods other than the intenw t ever cam e into contact w ith the phrase dtengineered tax services'' as a G oogle AdW ord.Custom ers w ho purchased services from D efendantvia referrals or through m ethods other than the intem et w ere apparently not exposed to the alleged infringing online advertisem ent,and thus itseem s unreasonable to believe thatthese custom ers could provide any relevantevidenceasto actualconfusion.Plaintiffhasnotshown thatthe identity and information regarding custom ers who never cam e into contact with the G oogle A dW ord at issue,the sole allegation of infringem ent,have any relevance to the issues of liability or of dnm ages in this case. Such broad,invasive,and disproportionatediscovery isnotperm issible. The Courttinds that the inform ation regarding the identity of custom ers who bought servicesonline is indeed relevantdue to theirpossible exposure to the alleged infringementat issue.ltispossible thatthese online custom ers were im pacted by the alleged infringement,and therefore Plaintiffis entitled to discovery regarding these customers.However,Defendanthas already produced to Plaintiffthe list ofthese custom ers,and the corresponding sales ofthese customers,who purchased Defendant's services through the internetbetween April 1,2014 to present.(DE 72-3,pgs.3-4).Thus,the Court sustains Defendant's objection to Plaintiffs RequestforProduction and deniesPlaintiff sM otion to Compel. IV . C O N C LUSIO N ln light of the foregoing,it is ORDERED that Defendant's objection to Plaintiff's RequestforProduction isSUSTAINED andPlaintiffsM otionto CompelgDE 69)isDENIED. D O N E A N D O R D ERED in am bers atW estPalm Beach,Palm Beach County,in the SouthernDistrictofFlorida,thisf dayofFebruary,2018. * I IA M A THE M AN UN ITED STATES M A GISTM TE JUD GE 8
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