Smartmatic USA Corp. v. Lindell

Background

Smartmatic USA Corp., Smartmatic International Holding B.V., and SGO Corporation Limited sued Michael J. Lindell and My Pillow, Inc. Smartmatic alleges that Lindell falsely claimed that Smartmatic’s election technology helped rig the 2020 presidential election in favor of President Joseph Biden. Smartmatic asserted defamation and violations of the Minnesota Deceptive Trade Practices Act and sought damages and injunctive relief.

The order concerned discovery, the pretrial process in which parties exchange information and evidence. Defendants previously sought production of ballot-marking devices, source code, and other election-related hardware and software. The court had denied those requests. Defendants then sought reconsideration, arguing that new information showed the requested source code might not be available from Los Angeles County and that Smartmatic had access to other versions of the code and a ballot-marking device.

Defendants also filed a third motion to compel additional discovery. They sought documents concerning Smartmatic’s relationship with Los Angeles County, more detailed information about Smartmatic’s damages, and answers about Smartmatic’s corporate structure, customers, and alleged defamatory statements. Smartmatic separately moved to extend fact discovery after the discovery deadline. Defendants also asked to amend the scheduling order.

Motion for Reconsideration

The court denied defendants’ Motion for Reconsideration. It held that reconsideration is limited to correcting a clear legal or factual error or considering genuinely new evidence that could not previously have been presented.

The court did not accept defendants’ account that Los Angeles County’s lawyer had said the escrowed source code was deleted. That lawyer said he did not recall making that statement and was confident he had not made it. A Los Angeles County employee also stated that the source code remained in escrow.

The court further held that defendants had learned about the alleged conversation before the earlier discovery ruling but did not present it then. The court therefore would not consider it as a basis for reconsideration. The court also found no clear factual error in its earlier conclusions about the source code or ballot-marking devices. Smartmatic could access a copy of source code that it had sent for testing and a trusted build file, but it could not access the escrowed source code that Los Angeles County installed on the devices. The court determined that the accessible materials were not necessarily the materials used in the 2020 election.

The court also rejected defendants’ argument that a licensing agreement showed Smartmatic possessed an exemplar ballot-marking device. Defendants acknowledged that they could have raised that argument during the original discovery motion. The court explained that an “exemplar” is an ideal, typical, or standard example. A device running software that did not exist during the 2020 election was not an exemplar of a product used in that election. The court did not decide whether Smartmatic’s expert report would ultimately be admissible or whether defendants’ expert needed more time to study a device.

Third Motion to Compel

The court granted in part and denied in part defendants’ Third Motion to Compel.

Requests for production

The court found defendants’ motion timely as to Requests for Production (RFPs) 9, 14, 20, and 21, but untimely as to RFPs 3 and 4. The court explained that Smartmatic’s responses did not clearly state that documents were being withheld based on confidentiality agreements for some requests. Defendants therefore were not required to challenge RFPs 9, 14, 20, and 21 earlier. Defendants waited too long to challenge RFPs 3 and 4, and the court also noted that defendants had not explained why those responses needed supplementation.

The court granted the motion as to RFP 14. That request sought documents concerning the truth or falsity of allegations about Smartmatic’s products, including allegations that the products did not subvert the election, were not hacked by China, did not connect to the internet, were used only in Los Angeles County, and were not shared with Dominion or Election Systems & Software. The court found those documents central to Smartmatic’s claims and defendants’ position that Lindell’s statements were true. Smartmatic must supplement its production after a reasonable search. The supplements must be marked “attorney’s eyes only,” meaning they may be viewed only by outside counsel for the parties under the court-ordered inspection protocol.

The court denied the motion as to RFP 9 because Smartmatic had agreed to produce responsive documents about ballot-marking devices used in Los Angeles County in the 2020 election, and defendants had not shown that responsive information was being withheld.

The court denied the motion as to RFP 20. That request sought communications with government authorities about certification, testing, approval, or security of Smartmatic products used in the 2020 election. The court found that certification was not a central issue and that the limited likely benefit of additional discovery was outweighed by the risk of improperly disclosing sensitive election-technology information.

The court denied the motion as to RFP 21. That request sought information about actual or suspected cybersecurity breaches involving Smartmatic and other election-technology companies. Smartmatic had agreed to produce responsive documents concerning its own products, and defendants had not shown that Smartmatic’s response was inadequate.

Damages interrogatories

The court granted the motion as to Interrogatory 20. Smartmatic must itemize its damages to the extent it had not already done so and support the itemization with evidence or citations to discovery already disclosed. The court found that defendants were entitled to understand Smartmatic’s damages theory and calculations rather than having to search through millions of pages of documents.

The court granted in part and denied in part the motion as to Interrogatories 31–34. Smartmatic must supplement Appendix A for each business opportunity for which it seeks damages. The supplementation must identify how Smartmatic calculated the initial probability of success and the probability of success as of February 2021, identify everyone who participated in those calculations, and identify the information those people relied on. Smartmatic need not provide the information for entries for which it seeks no damages, need not disclose privileged information, and must update its privilege log.

The court denied the motion as to Interrogatory 36. That interrogatory sought information about Smartmatic’s earlier efforts to win business in countries where it claimed lost profits. The court found that producing six years of business records for this purpose would impose a burden disproportionate to the likely usefulness of the information, especially because the supplementation required by Interrogatories 31–34 would provide a sufficient basis to examine Smartmatic’s damages calculations.

Other interrogatories

The court granted the motion as to Interrogatory 13. Smartmatic must provide responsive information from 2001 through 2004 and identify, by Bates number or a similar method, which prior productions contain responsive information from 2016 onward. The court found the information relevant to statements attributed to Lindell about Smartmatic’s relationships with other election-technology companies and its operations in Venezuela.

The court denied the motion as to Interrogatory 16. Smartmatic had identified 24 jurisdictions that purchased or contracted to purchase its election technology or services from January 1, 2018, to the present. The record supported Smartmatic’s position that defendants had previously considered the response sufficient, and the court would not require supplementation.

The court denied the motion as to Interrogatory 25. The request sought identification of statements by defendants about the 2020 presidential election that were not republications of someone else’s statements. The court found the distinction irrelevant because a person may be liable for repeating a defamatory statement as well as for making an original defamatory statement.

Scheduling and other motions

The court granted defendants’ Motion to Amend the Second Scheduling Order. It found good cause based on the scale and pace of motion practice, the withdrawal of Lindell’s prior counsel, and the time required to address the pending motions.

The court denied as moot Smartmatic’s Motion for Extension of Time to Complete Fact Discovery. Because the court extended the fact-discovery deadline, Smartmatic no longer needed the requested relief concerning depositions after the original deadline.

The revised schedule set fact discovery to be completed by June 11, 2024; rebuttal expert reports to be served by June 11, 2024; expert discovery to be completed by July 23, 2024; dispositive motions to be filed by September 23, 2024; and the case to be ready for a 20-day jury trial on January 23, 2025. The order did not decide whether Smartmatic or defendants would ultimately prevail on the defamation or trade-practices claims.