In re Cooper Tire & Rubber Co.

• Decision Date: 09 June 2009
• Docket Number: No. 07-4264.,07-4264.
• Citation: 568 F.3d 1180
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: In re COOPER TIRE & RUBBER CO., Petitioner.

568 F.3d 1180

In re COOPER TIRE & RUBBER CO., Petitioner.

No. 07-4264.

United States Court of Appeals, Tenth Circuit.

June 9, 2009.

Malcolm E. Wheeler (Marsha M. Piccone and LaMar F. Jost with him on the briefs), Wheeler Trigg Kennedy, L.L.P., Denver, CO, for Petitioner.

Brad H. Bearnson (Shawn P. Bailey with him on the brief), Bearnson & Peck, L.C., Logan, UT, for Real-Parties-In-Interest.

Before LUCERO, McCONNELL, and HOLMES, Circuit Judges.

HOLMES, Circuit Judge.

Petitioner Cooper Tire & Rubber Company ("Cooper") seeks a writ of mandamus directing the district court to vacate its discovery order and requiring the district court, on remand, to apply the provisions of Rule 26(b) of the Federal Rules of Civil Procedure. Specifically, Cooper asserts that the district court erred in not applying the proper standards regarding the scope of relevant information for purposes of discovery, the calculation of whether the requested discovery posed an undue burden, and the determination of whether trade secrets should be revealed. Reviewing the district court's order and the requirements of Rule 26(b), we conclude that Cooper's right to the issuance of the writ is not clear and indisputable. Further, we determine that the issuance of the writ is not appropriate under the circumstances of this case. Accordingly, exercising our jurisdiction under the All Writs Act, 28 U.S.C. § 1651(a), we DENY Cooper's petition.

I. BACKGROUND

This case arises from an accident on a Utah highway where the tread belt on a Cooper tire separated, causing the driver to lose control of the vehicle. As a result, the fifteen-passenger van went off the road and rolled over several times before coming to a stop. Nine of the eleven individuals in the van died from the injuries they sustained in the accident. The remaining two passengers suffered severe injuries but survived.

The survivors and heirs of the deceased passengers brought suit against DaimlerChrysler Corporation, DaimlerChrysler Motors Corporation, (collectively "Chrysler") and Cooper. Their complaint asserted various strict products liability, negligence, and breach of warranty claims against Chrysler and Cooper. With regard to Cooper, the plaintiffs alleged that Cooper knew or should have known that the tires were prone to tread separation within their normal and intended use. Specifically, the plaintiffs claimed that "prior to the production of the Van Tire, Cooper realized that its tires suffered from an unacceptably high rate of tread separations, but deliberately failed to make design changes to combat this knowledge or warn consumers about the problems with its tires." Pet'r App. at 21, 23, 39, 42 (Compl. & Jury Demand, dated Sept. 13, 2006). They alleged that information available to Cooper before production of the tire even began "confirmed that Cooper knew about these dangerous and defective conditions." Id. at 21, 23-24, 39, 42.

To substantiate these claims, the plaintiffs sought discovery from Cooper. Cooper, in turn, filed a motion for protection from the plaintiffs' "excessively broad scope" of discovery, asking that discovery instead be limited "to the design of the Green Tire Specification [`GTS'] at issue,¹ the plant at issue, and for a reasonable period of time (one year before and one year after the date of manufacture)." Id. at 295 (Cooper Tire & Rubber Co.'s Mem. in Supp. of its Mot. for Protection from Pls. Excessive Scope of Disc., dated May 23, 2007). In support of its motion, Cooper argued that the proper scope of discovery was similar products, that is, similar tires in the context of this case. Cooper defined similar tires as those tires manufactured to the same GTS. Accordingly, Cooper asserted that discovery should be limited to the eleven tire brands made to GTS 5015, which is the GTS of the tire at issue.² Additionally, Cooper argued that the plaintiffs had not met their burden of demonstrating that the trade secrets they sought were relevant and necessary to the lawsuit.

The plaintiffs then filed a motion to compel, arguing that their discovery requests were specific to the five separate manufacturing and design defects they alleged to exist in the tire at issue³ and accusing Cooper of engaging in a history of discovery abuse and of making self-serving objections to impermissibly narrow the scope of discovery. In response, Cooper filed a memorandum in opposition to the motion to compel in which it reiterated its arguments about the definition of similar tires and the burden for requesting trade secrets and also argued that some discovery requests sought information about different cases, claims, and tires. In their reply, the plaintiffs noted, inter alia, that the issue of notice was a part of their complaint, they bear the burden on notice at trial, and their requests would assist them in meeting this burden.

The magistrate declined to accept Cooper's view of similar tires and compelled Cooper to comply with the discovery requests with the exception of requests regarding information in other complaints or suits brought against Cooper. In coming to this conclusion, the magistrate noted that discovery is proper "`regarding any matter, not privileged, that is relevant to the claim or defense of any party.'" Id. at 785 (Mem. Decision & Order, dated Aug. 17, 2007) (quoting Fed.R.Civ.P. 26(b)(1) (2006)). Although the magistrate did indicate that discovery was not limited to issues raised in the pleadings, he also recognized that the 2000 amendments to the Federal Rules of Civil Procedure "direct[ed] parties and the courts to `focus on the actual claims and defenses involved in the action' in determining relevance for purposes of discovery." Id. at 786 (quoting Fed.R.Civ.P. 26 advisory committee's note (2000)).

Additionally, the magistrate rejected Cooper's contention that the plaintiffs bore the burden of demonstrating substantial similarity of the tires at this stage and noted that the plaintiffs would face this burden when they sought to admit the evidence at trial. He also reasoned that the definition of substantial similarity might be more relaxed due to the plaintiffs' "broad theory of the case." Id. at 787. Ultimately, the magistrate rejected Cooper's arguments about substantial similarity because he determined they were more appropriate to the question of whether the requested information is admissible as opposed to whether it is discoverable.

The magistrate also considered Cooper's arguments regarding the burden of the discovery requests and trade secrets and found them to be without merit. The magistrate, although sympathetic to Cooper's concerns about the amount of discovery requested, found that the plaintiffs should be permitted to engage in discovery in line with their broad theory of the case. The magistrate also cited the plaintiffs' broad theory in determining that they had met their burden of demonstrating that the trade secrets were relevant and necessary to their case. The magistrate further noted that Cooper's proposed protective order had been adopted, which would provide adequate protection against improper disclosure of their trade secrets. Accordingly, the magistrate ordered Cooper to comply with the discovery requests.

Cooper filed objections to the magistrate's order in which it argued that the magistrate erred in applying a relaxed standard of substantial similarity, failed to apply the appropriate standard for discovery of trade secrets, allowed for overbroad discovery, and imposed an undue and impossible burden on Cooper. The district court heard oral arguments regarding Cooper's objections where Cooper essentially reiterated the arguments that it had previously made in its motions and in its objection to the magistrate's order. Cooper also argued that tread separation is not a defect in and of itself but rather is caused by a defect; the relevant question is then what caused that particular tread to separate.

As to the issue of undue burden, the plaintiffs told the district court that most of the documents had already been produced in other cases and they were willing to retrieve those documents from the electronic database in other cases so that they could be utilized in the instant case. They also volunteered to undertake the printing and copying and to bear those costs. The plaintiffs also argued that Cooper's proposed definition of substantially similar tires was tantamount to defining "substantially similar" as "identical." Pet'r App. at 931 (Miscellaneous Hearing, dated Oct. 29, 2007).

The plaintiffs argued that the appropriate standard was their proffered standard, which had been accepted in other cases, that generally different models of tires would be substantially similar if they share characteristics with the accident-causing tire that are pertinent to the litigation. Here, they said that they sought information on different models with the same critical components that affect tread belt separation. The plaintiffs also contested whether Cooper had demonstrated that their documents contained trade secrets and noted that these documents had been produced in other litigation and a protective order was in effect.

The district court overruled Cooper's objections and affirmed the magistrate's ruling. Cooper then filed the petition for writ of mandamus now before us. Meanwhile, before the district court, Cooper sought, and was granted, a stay of the disputed discovery pending our resolution of this petition.

II. DISCUSSION

Cooper seeks a writ of mandamus vacating the district court's order and directing the district court to apply the correct legal standards under Rule 26(b) in making its discovery ruling. Cooper's main arguments are that the district court impermissibly defined the scope of discovery in a manner that conflicts with the 1983, 1993, and 2000 amendments to Rule 26(b) and that the district court ordered the production of documents containing trade secrets without applying the correct...