Praecipio Consulting v. Howser

Background

The court considered a joint letter brief concerning documents relating to an internal audit conducted by a consultant for Praecipio Consulting in a trade-secret case. The dispute was referred to the undersigned for discovery purposes.

Defendants argued that testimony from Praecipio’s chief executive officer showed that the audit results were provided in writing and that the resulting Master Services Agreement, or MSA, audit documents should be produced. Defendants contended that the audit concerned risks that Praecipio performed work without customer contracts containing confidentiality provisions. They argued that the steps Praecipio took to protect its alleged trade secrets were relevant and that the audit documents were also relevant to whether defendants caused Praecipio’s claimed revenue losses or whether other causes contributed to those losses.

Praecipio argued that no audit of nondisclosure agreements had occurred. It said the MSA audit instead concerned official engagement terms, including payment terms, and identified risks unrelated to the litigation. Praecipio also argued that documents concerning an alleged nondisclosure-agreement audit did not exist and that the MSA audit documents were not relevant.

Court’s Analysis

The court explained that discovery may cover nonprivileged information relevant to a claim or defense and proportional to the needs of the case. Relevance for discovery is broad, but discovery is not unlimited. The party seeking discovery bears the burden of showing relevance, while the party resisting discovery must specifically explain its objections. The court also discussed the duty to supplement discovery responses when a party learns that an earlier response is materially incomplete or incorrect.

The court reviewed the MSA document in camera, meaning privately rather than as part of the public record, along with additional documents and declarations. It found that the MSA audit document was not an audit of confidentiality provisions. The document did not discuss nondisclosure agreements or confidentiality provisions. The court said defendants’ contrary understanding appeared to result from a misunderstanding or imprecision during the chief executive officer’s deposition. The court also stated that submitting deposition errata—written changes and reasons for changes to a deposition transcript—would have been a better practice under Rule 30, given the alleged misunderstanding.

The court rejected defendants’ argument that the MSA document should be produced because it concerned confidentiality issues. But it accepted defendants’ separate argument that the document was relevant to alternative causation and damages. Defendants’ Request for Production No. 6 sought documents related to alleged damages from the claimed misappropriation or unauthorized use of trade secrets or confidential information, including documents concerning lost customers, revenue, or opportunities. The court found the MSA document broadly relevant and responsive to that request. Because the document was already in counsel’s possession and was not unusually lengthy or difficult to process, the court found that a burden objection did not apply.

Ruling

The court ordered production of the MSA document identified by the filename “MSA work (5).” It also ordered production of seventeen versions of that document, identified by the filenames “v1” through “v17.”

The court further ordered production of the “All Priorities_out_to_Board” document and two Slack bulletins identified as “bulletin_1” and “bulletin_2.” To the extent it had not already been produced, the court also ordered production of the “Praecipio MSA (Boiler Plate)” template referenced or hyperlinked in “bulletin_1.” The court ordered production of the “Accounts Without MSAs” document, which it assumed was the same document as the “MSA Cleanup Spreadsheet.”

The court ruled that neither version of another document referenced in the MSA document had to be produced because that document was not related to confidentiality provisions and was not responsive to Request for Production No. 6. The court also denied defendants’ motion to the extent it sought documents that did not exist.

In the conclusion, the court GRANTS-IN-PART defendants’ motion to compel and ordered Praecipio to produce the specified documents to defendants’ counsel, with appropriate designations under the protective order, by December 4, 2025. Praecipio was also ordered to file a status report on December 5, 2025. The court stated that the order resolved Docket 59.