New Hampshire Ball Bearings v. Jackson, 2008-073.

CourtSupreme Court of New Hampshire
Citation969 A.2d 351
Docket NumberNo. 2008-073.,2008-073.
Decision Date18 March 2009
969 A.2d 351
W. Scott JACKSON and another.
No. 2008-073.
Supreme Court of New Hampshire.
Argued: January 9, 2009.
Opinion Issued: March 18, 2009.

[969 A.2d 354]

Orr & Reno, P.A., of Concord (Lisa Snow Wade on the brief and orally), for the plaintiff.

[969 A.2d 355]

Cook, Little, Rosenblatt & Manson P.L.L.C., of Manchester (Arnold Rosenblatt and Daphne Lessard on the brief, and Mr. Rosenblatt orally), for defendant W. Scott Jackson.

Downs Rachlin Martin P.L.L.C., of Littleton (Kate Strickland on the brief), and Snell & Wilmer L.L.P, of Phoenix, Arizona (Sid Leach on the brief and orally), for defendant Sargent Controls and Aerospace.


The plaintiff, New Hampshire Ball Bearings, Inc. (NHBB), appeals decisions of the Superior Court (Smukler, J.) concerning discovery motions, evidentiary rulings, jury instructions and the denial of post-trial motions. We affirm.

I. Pre-Trial Proceedings

NHBB initiated this suit in early May 2006, alleging that W. Scott Jackson, a former NHBB employee, breached his confidentiality agreement by taking approximately fifty-three NHBB computer files when he left the company, and that Jackson and his current employer, Sargent Controls and Aerospace (Sargent), misappropriated NHBB trade secrets. The parties engaged in a lengthy and bitterly fought discovery process. At the start of the case, the trial court issued two orders requiring the defendants to preserve all evidence relevant to the case. After seven months of discovery, NHBB filed a motion to compel Sargent to grant NHBB access to its servers, server backup tapes and employee computers in all three of Sargent's engineering divisions at its facility in Tucson, Arizona. The court denied the request, stating that the potential imaging of up to 250 hard drives was "too broad and burdensome," but allowed NHBB to make a narrower request. NHBB renewed its request to include all Sargent backup tapes and servers, but only thirty-five employee computers. The thirty-five computers were those used in the Kahr Bearing Engineering Group, the Sargent division dedicated to manufacturing bearings. The trial court granted NHBB's revised request in March 2007.

The parties, however, disputed their obligations under the order. Sargent allowed NHBB access to the thirty-five hard drives in April, but refused access to its servers or backup tapes. In late May, the trial court clarified its order to include the backup tapes, but not Sargent's servers; the trial court ordered Sargent to produce the backup tapes. In late August, one month before trial, Sargent filed a motion in limine requesting the exclusion of evidence concerning discovery disputes under New Hampshire Rules of Evidence 401, 402 and 403. Over NHBB's objection, the trial court granted Sargent's motion. On appeal, NHBB challenges the trial court's rulings concerning discovery and the granting of the defendants' motion in limine.

II. Trial

The jury could have found the following facts. Jackson worked for NHBB in various engineering capacities for over twenty years. During December 2005 and January 2006, Harry Labbe, a former NHBB employee then working at Sargent, recruited Jackson and convinced him to apply for the position of northeast sales manager. On January 29, 2006, Jackson returned from an interview with Sargent in Tucson, Arizona, and accepted a position with Sargent on February 1. Jackson resigned from NHBB on February 1 and returned his NHBB-issued laptop (NHBB laptop).

One month after he left, NHBB employees created a forensic image of Jackson's NHBB laptop as part of a forensic training

969 A.2d 356

course. A forensic image is an exact replica, bit for bit, of the original storage device that allows investigation of past use without altering the original evidence. Analysis of the forensic image with forensic software allows an investigator to determine what peripheral devices have been connected to the device, what a user accessed, what has been stored on the device, and when it was last accessed or modified. Because deleted files are not actually erased from storage media, analysts are able to determine both current and deleted files so long as the latter have not been completely overwritten with new data. When the NHBB laptop was imaged, however, the equipment operator failed to activate the write blocker on the imaging equipment, thereby changing the last access dates for certain system files.

Analysis of the forensic image showed that after returning from Tucson on the night of January 29, Jackson twice remotely accessed NHBB's virtual private network (VPN), and serially accessed a number of files on the NHBB laptop. Each logon to the VPN lasted only a few minutes, and Jackson testified that he had checked his NHBB email that night. Witnesses testified that his brief VPN access with limited data transmission was consistent with retrieving email and not downloading files. Serial access occurs when a user accesses multiple files at the same time, thereby creating the same last access date for each file. NHBB's expert testified that the most probable cause of serial access is copying files; Sargent's expert, however, discussed other possible causes, such as simply selecting or moving files. Of those files serially accessed, NHBB identified roughly fifty-three that it believed to contain trade secrets or confidential information. Those files contained employee performance reviews as well as a number of documents used in computer-aided engineering including: engineering formulas, NHBB part specifications, production specifications and information on customers' products and requirements. There was nothing suspect about Jackson possessing such files during his employment, as they were either placed on the laptop by NHBB or created while working on NHBB projects. The other serially accessed files were Jackson's personal files. The image also showed that a Lexar flash drive was connected to the NHBB laptop the night of January 29.

Based largely upon recovered emails between Labbe and Jackson during his recruitment, Jackson's remote VPN access, the serial access of files on the NHBB laptop, and the use of a peripheral flash drive, NHBB filed suit in May 2006, alleging misappropriation of trade secrets. The trial court issued an order for all parties to preserve any evidence related to the case.

In late 2006, NHBB requested that Jackson turn over for imaging his digital camera, the Lexar flash drive, his wife's laptop (Jackson laptop), his PDA—personal digital assistant, containing his contacts and date planner—his wife's mp3 player, and additional flash drives that were connected to the NHBB or Jackson laptops at various times. Jackson and his wife testified that the additional flash drives belonged to their children and had been lost or destroyed. Jackson did, however, produce one additional flash drive during trial in September 2007, after his wife found it in her son's room at her ex-husband's house.

Comparison of the NHBB laptop and Lexar flash drive images showed that some, but not all, of the serially accessed files were copied from the NHBB laptop to the flash drive. Jackson testified that after he decided to resign at NHBB, he took all of his personal files off the NHBB

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laptop using the flash drive and transferred them to the Jackson laptop. The images showed that the files copied on the night of January 29 were predominantly personal files, such as Jackson's photographs, country club documents, and divorce and marriage records, though NHBB claimed other NHBB files were taken over a period of time.

The image also showed that at least two NHBB documents were taken from the NHBB laptop and created and opened on the flash drive as Microsoft Excel spreadsheets. NHBB's expert testified that subsequent activity on the flash drive made it difficult to determine which, if any, other NHBB files were copied. The two copied files contained engineering formulas and part specifications including part dimensions, materials, performance capacities and tooling specifications for manufacturing machines. Jackson and other witnesses testified that the contents of those files were engineering formulas and specifications generally known in the bearing industry and widely available from customers, engineering textbooks and NHBB's internet catalog.

Analysis of the Lexar flash drive image showed that a large amount of data was added to the drive, possibly overwriting any previous contents. It also showed that in February 2006, the drive had been connected to the laptop of Ryan Faust, a Sargent employee. Both Jackson and Faust testified that the drive was used to provide Jackson with Sargent's sales data for recent years, and that nothing was transferred from the drive to the computer. Analysis of a later forensic image of Faust's computer did not reveal evidence of any NHBB files, although it did show that a large amount of data had been added to the computer, which had been reassigned to a different employee for a period of time, potentially overwriting the remnants of deleted files.

The forensic image of the Jackson laptop revealed the presence of the two NHBB files transferred to the Lexar flash drive on January 29, as well as an additional spreadsheet that was on the NHBB computer but not the Lexar flash drive. Jackson testified that after receiving a phone call about the suit on May 5, 2006, he had difficulty sleeping and searched his computer at 4:00 a.m. for any NHBB files he may have accidentally copied, found three, and placed them in the recycling bin—where they remained—with instructions not to erase them. Sometime in June 2007, some of the files' last access dates were changed, overwriting the prior last access date, which NHBB argued could have been after Jackson left NHBB. Analysis of the Jackson laptop did not reveal any of the other NHBB files at issue.

The image of the Jackson laptop also...

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