Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.

Background

On July 2, 2020, Optronic Technologies, Inc. filed an emergency request for a temporary restraining order (TRO) and an order requiring Ningbo Sunny Electronic Co., Ltd. and Celestron Acquisition, LLC to produce evidence. The court granted that request and entered a TRO.

The TRO barred Ningbo Sunny and Celestron from selling, transferring, or otherwise disposing of certain assets, products, or receivables associated with telescopes manufactured by Ningbo Sunny and imported into the United States through ViewWay Optics Enterprises Co., Ltd. It also required them to produce documents concerning telescope sales to, purchases from, or imports by ViewWay from January 1, 2020, through the present. The TRO set a July 15, 2020 hearing to decide whether the temporary relief should continue or whether other relief should issue.

Celestron then filed an application seeking clarification. It asked to produce documents on an “Attorneys’ Eyes Only” (AEO) basis, meaning that specified materials would be available only to attorneys, and asked to resume selling products manufactured by Ningbo Sunny if it turned over to Optronic money not yet paid to ViewWay, minus ViewWay’s margin.

Court’s analysis

The court explained that Federal Rule of Civil Procedure 60(a) allows correction of a clerical mistake or an oversight in an order. It concluded that neither of Celestron’s requests identified a mistake, omission, or oversight in the TRO. Instead, Celestron was seeking to modify or dissolve the TRO. The court stated that Celestron could continue negotiating with Optronic and could present its proposal at the July 15 hearing, but the proposal was not properly characterized as a clarification.

The court also declined to modify the TRO before its expiration to allow Celestron to resume sales. Celestron argued that continued restrictions could cause substantial harm to its relationship with international customers, but it did not identify a customer or contract requiring immediate fulfillment. The court found that Celestron had not provided information fundamentally changing the balance of hardships considered when the TRO was issued.

As to document protection, Celestron identified competitively sensitive information, including shipment SKU numbers, volumes, and prices. Optronic agreed that pricing information could be produced on an AEO basis but argued that its chief executive officer, Peter Morea, needed access to understand other aspects of the discovery. Because the court lacked sufficient information about the documents’ contents, it deferred the broader AEO question to the July 15 hearing.

Ruling

Judge Edward J. Davila granted in part and denied in part Celestron’s Motion for Clarification. The court denied Celestron’s request to resume sales and ordered that the TRO remain in effect until the July 15 show-cause hearing. In the interim, Celestron was ordered to produce all competitively sensitive documents, unredacted except as necessary to preserve privilege, on an AEO basis and to make redacted versions available to Optronic.