Northwest Airlines v. American Airlines, Civ. No. 4-91-539.

• Decision Date: 17 November 1994
• Docket Number: Civ. No. 4-91-539.
• Citation: 870 F. Supp. 1504
• Parties: NORTHWEST AIRLINES, INC., Plaintiff, v. AMERICAN AIRLINES, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

870 F. Supp. 1504

NORTHWEST AIRLINES, INC., Plaintiff, v. AMERICAN AIRLINES, INC., Defendant.

Civ. No. 4-91-539.

United States District Court, D. Minnesota, Fourth Division.

November 17, 1994.

Thomas W. Tinkham, William R. Stoeri, Stephen Paul Lucke, Craig D. Diviney, Christopher John Riley, Stacey M. Fuller, Edward Brian Magarian, Jeffrey G. McGuire, Dorsey & Whitney, Mpls, MN, for Northwest Airlines, Inc.

Janie S. Mayeron, Richard Alvin Kaplan, Julie Miriam Friedman, Daniel D. Hill, Popham

Haik Schnobrich & Kaufman, Mpls, MN, James W. Quinn, David W. Gartenstein, Stephen D. Kahn, David B. Goldstein, Sabrina Shroff, Robert Stefanski, Weil Gotshal & Manges, New York City, Donald E. Herrmann, Kelly Hart & Hallman, Ft Worth, TX, for American Airlines, Inc.

Douglas A. Kelley, Steven Eugene Wolter, Kelley Law Office, Mpls, MN, for Laura H. Liu.

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, Circuit Judge, Sitting by Designation.

Plaintiff Northwest Airlines, Inc., (Northwest) brought this declaratory judgment action against defendant American Airlines, Inc., (American) seeking a determination of the legal issues surrounding Northwest's hiring of certain American employees. American counterclaimed, alleging Northwest had tortiously interfered with American's employment contracts, misappropriated trade secrets related to finance and yield management information, and infringed certain copyrighted material.¹

Now before the court are Northwest's motions for partial reconsideration of a previous order denying its motion for summary judgment on American's misappropriation claims; to strike American's reply to the motions for partial summary judgment and reconsideration; for partial summary adjudication that American's alleged trade secrets became public on July 7, 1993, to cut off damages as of that date, to prevent American from referring to, or presenting evidence of, the existence of trade secrets after that date, and to unseal all documents in the court files; and for summary judgment on American's counterclaim for copyright infringement.

I.

Northwest moves to strike American's entire May 17, 1994 Memorandum in Opposition to Northwest Airlines, Inc.'s Motion for Partial Summary Judgment and Partial Reconsideration on the grounds that American's discovery was untimely and that the memorandum relies in part on evidence presented to the court but not to Northwest. In the alternative, Northwest moves to strike only some of the evidence on the above grounds.

Northwest's motion for partial reconsideration relies in part on evidence which emerged in early 1994. In preparation for the January 26, 1994 deposition of Dr. Richard Larson, American produced for the first time a document entitled "Overview of Yield Management at American Airlines" (Overview).² Barry Smith of American Airlines Decision Technologies (AADT) prepared the Overview for a presentation he made to Dr. James Tien on December 17, 1990. Dr. Tien visited American as a representative of the Operations Research Society of America (ORSA), which was evaluating nominees for its 1991 practice award. The award was eventually given to American.

Northwest argues that American improperly conducted discovery regarding the Overview after the December 17, 1993 fact discovery deadline. When both sides produced new documents after the deadline, the parties agreed to follow-up fact discovery on those documents. Affidavit of Stacey M. Fuller (May 23, 1994), Ex. C (Fuller Aff.); Affidavit of David B. Goldstein (May 25, 1994), Ex. # 6 (Goldstein Aff.). Northwest argues that only it, and not American, could seek discovery on the Overview because it had been in American's possession since its creation.

On March 28, 1994, Northwest requested that American provide "all materials regarding American and the ORSA prize competition which ORSA has." Goldstein Aff., Ex. # 1. In response, American served a subpoena duces tecum on ORSA, requesting that it produce all documents related to AADT on April 7, 1994. American informed Northwest of the subpoena. Goldstein Aff., Ex. # 2. Northwest served a second subpoena on ORSA on April 13, 1994. ORSA objected to the subpoenas on the ground that they requested proprietary information concerning ORSA's deliberative process and indicated it would only provide a response if the parties signed a protective order. See Goldstein Aff., Exs. # 3, # 9. American and Northwest both attempted to negotiate agreements with ORSA to maintain the alleged confidentiality of the documents, but only ORSA and American reached an agreement.

After being petitioned by ORSA, the United States District Court for the District of Rhode Island entered a protective order on May 13, 1994, requiring counsel for both Northwest and American to sign a secrecy agreement before receiving confidential information from ORSA. American signed the agreement and received copies of the ORSA documents. Northwest and ORSA did not reach an agreement. American offered to provide the documents to Northwest if it would abide by American's agreement with ORSA until the dispute between Northwest and ORSA could be resolved. Under no obligation to accept, Northwest refused. Fuller Aff., Ex. I.

American's memorandum in opposition to Northwest's motion for partial reconsideration relies on some evidence obtained from ORSA through this process. Northwest objects to the use of an affidavit from Dr. Tien and a three-page memorandum attached as an exhibit (Tien documents) because they were produced after the fact discovery deadline.³ Northwest requested that American obtain the documents from ORSA, however, and it was aware that American had issued the subpoena to ORSA.⁴ Under the circumstances the Tien documents should not be excluded as untimely.⁵ Northwest's motion to strike all or part of American's response because it references materials produced beyond the deadline should be denied.

Northwest also objects to the use of the Tien documents on the ground that they were submitted to this court ex parte. On May 17, 1994, the deadline for filing its reply to Northwest's motion for partial reconsideration, American filed a brief referring in the section on reconsideration to information from ORSA and submitted the Tien documents as supporting exhibits. It served on Northwest a redacted version of the brief and did not include the Tien documents. That same day American submitted a letter to the court detailing the dispute between Northwest and ORSA and explaining why it had not provided Northwest with copies of the documents subject to the Rhode Island protective order. American sent a copy of the letter to Northwest's counsel.

The adversary system relies on the ability of counsel to analyze the evidence and construct the strongest possible argument for each party. It functions best with the benefit of argument from all counsel. Since the Tien documents and references to them were submitted ex parte in American's response to Northwest's motion for partial reconsideration, it would not be appropriate for the court to rely on them at this time. Northwest's motion to strike the Tien documents as ex parte communications should be granted.⁶

Northwest also moves to strike the affidavit of Thomas Cook, president of AADT at the time of the ORSA award. Northwest argues first that the Cook affidavit should be stricken because he "testified at his deposition that he had no personal knowledge regarding whether the ORSA document was disclosed to ORSA or to others outside American." Northwest Memorandum in Support of Motion to Strike at 9. However, Cook's statements in the affidavit regarding disclosure of the documents are each prefaced with "To the best of my knowledge...."⁷ Because Cook did not testify beyond his personal knowledge, Northwest's argument is without merit.

Northwest argues in addition that Cook's subsequent deposition testimony is inconsistent with his affidavit. In his affidavit, Cook states that conversations with ORSA representatives led him to believe that they were interested in learning about the general nature and impact of operations research on American, not about proprietary information. Cook's deposition testimony is open to several interpretations. Northwest argues that Cook admitted that he had no basis for his understanding that the ORSA process was confidential. American argues that Cook stated that he could infer confidentiality from the nature of the competition process. The court need not decide whether Cook's statements are inconsistent. That question goes to the weight of the evidence and is for the trier of fact. The motion to strike Cook's affidavit should be denied.

Finally, Northwest moves to strike an errata sheet attempting to revise the deposition testimony of Dr. Richard Larson, ORSA's president. Larson's deposition was taken January 26, 1994. The errata sheet was signed by Larson on April 11, 1994 and forwarded to the court reporter by American attorneys on May 9, 1994. Fuller Aff., Ex. A. During his deposition, Larson was shown a list of approximately 200 documents that he had reviewed or skimmed in preparation for the deposition and was asked to place a check mark next to those which he believed were in the public domain. He checked the Overview document. In the errata sheet, Larson removed that check mark.⁸

Northwest argues that the errata sheet should be stricken because it was untimely under Fed.Rule Civ.Pro. 30(e), which as amended in 1993 provides:

If requested by the deponent or a party before completion of the deposition, the deponent shall have 30 days after being notified by the officer that the transcript or recording is available in which to review the transcript or recording and, if there are changes in form or substance, to sign a statement reciting such changes and the reasons given by the deponent for making them. The officer shall indicate in the certificate prescribed by subdivision (f)(1) whether any review was requested and, if

...