North American Science Associates, LLC v. Conforti

Background

North American Science Associates, LLC and NAMSA Holdco, LLC sued Michael Conforti, Pamela Conforti, and Phoenix Preclinical Labs, LLC. The claims included alleged trade-secret misappropriation under the Defend Trade Secrets Act, breaches of confidentiality agreements, and commercial defamation. The plaintiffs moved to compel discovery and to preclude the defendants from asserting the marital-communications privilege as both a “sword and shield.”

The Confortis had agreed to waive the privilege for three categories of communications: communications about alleged evidence destruction through the time it allegedly occurred; communications about the funding, founding, creation, organization, and operation of Phoenix Preclinical; and communications about the alleged taking or exchange of the plaintiffs’ proprietary information or trade secrets. The agreement stated that this waiver alone did not create a broader waiver.

Rulings and reasoning

The court held that the plaintiffs could not use the agreed waiver, standing alone, to obtain a broader waiver. The plaintiffs had agreed that the three specified waivers did not themselves create a general waiver, and the court said it would hold the plaintiffs to that agreement. The court did not need to decide whether judicial estoppel applied.

The court rejected the plaintiffs’ argument that Pamela Conforti’s testimony about Michael Conforti serving as a “sounding board” for selecting a building fell within the waiver. The testimony concerned Phoenix Investments’ purchase of a property before Pamela Conforti decided to form Phoenix Preclinical. The court found the connection too attenuated to bring those communications within the waiver concerning Phoenix Preclinical. It also concluded that the plaintiffs had not shown that the discussions involved taking or exchanging trade secrets or proprietary information. The motion was denied as to those discussions.

The court found no waiver based on alleged inconsistencies in Michael Conforti’s deposition testimony. It concluded that the questions producing the earlier answers were not clearly limited to the topics covered by the waiver and that the later testimony clarified that he had no communications with Pamela Conforti about the specified Phoenix Preclinical topics. The court therefore denied the motion insofar as it relied on that testimony.

The defendants later withdrew their privilege assertions over exhibits PC10 and PC11 and agreed to produce them. The court denied as moot the request concerning use of those exhibits at depositions and denied the request to reopen the expedited depositions solely to examine the Confortis about them.

The court denied as moot the request concerning FlexSchema and Phoenix Preclinical emails because defense counsel represented that no responsive documents from those accounts were being withheld based on marital privilege. The court also denied the request concerning pre-February 26, 2021 APS emails because the plaintiffs had not shown that the requested discovery was relevant or proportional, particularly because the plaintiffs possessed and had searched the APS email servers. The court did not decide whether the Confortis had a reasonable expectation of privacy in those APS emails.

The court declined to decide whether to adopt a “business affairs” exception to the marital-communications privilege. It stated that, if the dispute over MC12 and MC13 remained, the parties could address that issue in short letter briefs. The court also denied as moot the request to require the defendants to use the plaintiffs’ proposed search terms.

Regarding amended privilege logs, the court rejected the plaintiffs’ argument concerning PRIV007356 for the same reasons it rejected the argument about the Phoenix Investments facility. It declined to find a waiver based only on competing descriptions of PHOENIX_00110619 and PRIV07136 because the documents were not before the court. The plaintiffs would need to meet and confer and file a properly supported motion if they still sought those documents or relief concerning the amended log.

Disposition

The court’s order states that the plaintiffs’ motion to compel discovery and preclude the defendants from asserting the marital-communications privilege as a sword and shield is DENIED. To the extent the plaintiffs still seek production of MC12 and MC13 and the defendants maintain their privilege assertions, the plaintiffs may submit a letter brief of no more than three pages with the exhibits for in-camera review within seven days after the order, and the defendants may respond within seven days after that filing. The parties may not raise new issues in those briefs.