Fareportal, Inc. v. HNA Group Co., LTD.

Background

Fareportal sued HNA Group (International) Co., Ltd., Jason Chen, and Nishith Kumar for misappropriation of trade secrets, unfair competition, and other claims. Fareportal alleged that the defendants participated in a scheme to take its confidential information and defame the company. Kumar represented himself, so an “attorneys’ eyes only” designation would have prevented him from seeing the restricted material entirely.

In an earlier discovery order, the court directed Fareportal to identify specific categories of information that Kumar should not see and to explain the competitive risk. Fareportal proposed withholding three categories: financial information after Kumar’s employment ended, supplier agreements after that date, and business-planning information after that date. Kumar objected, arguing that he needed later information to test whether statements attributed to him or other defendants were false and that some of the information was stale.

Court’s analysis

The court agreed that the proposed categories were appropriate in substance but concluded that the cutoff dates needed adjustment. Kumar’s employment ended on May 27, 2016. The court reasoned that the alleged disparagement was not limited to events occurring before that date and that Kumar could need later information to evaluate the truth of the alleged statements. The parties agreed that the alleged statements likely ended when Travana filed for bankruptcy on April 19, 2017.

The court therefore concluded that Kumar was entitled to documents in the three categories through April 19, 2017, with one exception: financial information could be withheld only after the end of 2019. The court also ordered Fareportal to produce any document related to the disparagement claim regardless of its date. It overruled most of Kumar’s other objections, including objections that the categories were too broad and that later financial information might be relevant to other investigations or litigation.

Disposition

The court balanced Fareportal’s confidentiality concerns against Kumar’s need for information relevant to liability and damages. It ordered Fareportal to revise its proposed protective order and file it within seven days. Fareportal had to remove references describing the document as a stipulated protective order because Kumar did not agree to it. Fareportal could also make changes proposed by HNA at the hearing.

The order was signed by Thomas S. Hixson, United States Magistrate Judge. This was a discovery and protective-order ruling, not a decision on the underlying trade-secret, unfair-competition, or defamation claims.