State ex rel. Arrow Concrete Co. v. Hill

• Citation: 194 W.Va. 239,460 S.E.2d 54
• Decision Date: 19 June 1995
• Docket Number: No. 22842,22842
• Court: Supreme Court of West Virginia
• Parties: , 1995-2 Trade Cases P 71,116 STATE of West Virginia ex rel. ARROW CONCRETE COMPANY, a West Virginia Corporation; Arrow Industries Corporation, an Ohio Corporation; and Paul Burge, Jr., Petitioners, v. Honorable George W. HILL, Jr., Judge of The Circuit Court of Wood County, and On Target Concrete, Inc., Respondents.

Page 54

460 S.E.2d 54

194 W.Va. 239, 1995-2 Trade Cases P 71,116

STATE of West Virginia ex rel. ARROW CONCRETE COMPANY, a West Virginia Corporation; Arrow Industries Corporation, an Ohio Corporation; and Paul Burge, Jr., Petitioners, v. Honorable George W. HILL, Jr., Judge of The Circuit Court of Wood County, and On Target Concrete, Inc., Respondents.

No. 22842.

Supreme Court of Appeals of West Virginia.

Submitted May 2, 1995.

Decided June 19, 1995.

Syllabus by the Court

1. " 'A writ of prohibition is available to correct a clear legal error resulting from a trial court's substantial abuse of its discretion in regard to discovery orders.' Syllabus Point 1, State Farm Mut. Auto. Ins. Co. v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992)." Syl. pt. 1, State ex rel. Erickson v. Hill, 191 W.Va. 320, 445 S.E.2d 503 (1994).

2. Ordinarily the denial of a motion for failure to state a claim upon which relief can be granted made pursuant to West Virginia Rules of Civil Procedure 12(b)(6) is interlocutory and is, therefore, not immediately appealable.

3. "Under Rule 26(b)(1)(iii) of the West Virginia Rules of Civil Procedure, a trial court may limit discovery if it finds that the discovery is unduly burdensome or expensive, taking into account the needs of the case, the amount in controversy, limitations on the parties' resources, and the importance of the issues at stake in the litigation." Syl. pt. 2, State Farm Mutual Automobile Insurance Co. v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992).

4. "Where a claim is made that a discovery request is unduly burdensome under Rule 26(b)(1)(iii) of the West Virginia Rules of Civil Procedure, the trial court should consider several factors. First, a court should weigh the requesting party's need to obtain the information against the burden that producing the information places on the opposing party. This requires an analysis of the issues in the case, the amount in controversy, and the resources of the parties. Secondly, the opposing party has the obligation to show why the discovery is burdensome unless, in light of the issues, the discovery request is oppressive on its face. Finally, the court must consider the relevancy and materiality of the information sought." Syl. pt. 3, State Farm Mutual Automobile Insurance Co. v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992).

5. "The question of the relevancy of the information sought through discovery essentially involves a determination of how substantively the information requested bears on the issues to be tried. However, under Rule 26(b)(1) of the West Virginia Rules of Civil Procedure, discovery is not limited only to admissible evidence, but applies to information reasonably calculated to lead to the discovery of admissible evidence." Syl. pt. 4, State Farm Mutual Automobile Insurance Co. v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992).

6. "The following six-factor test should be applied in determining whether there is 'good cause' pursuant to Rule 26(c)(7) of the West Virginia Rules of Civil Procedure to issue a protective order: (1) The extent to which the information is known outside of the defendant's business; (2) The extent to which it is known by employees and others involved in the defendant's business; (3) The extent of the measures taken by the defendant to guard the secrecy of the information; (4) The value of the information to the defendant and competitors; (5) The amount of effort or money expended by the defendant in developing the information; and (6) The ease or difficulty with which the information could be properly acquired or duplicated by others." Syllabus, State ex rel. Johnson v. Tsapis, 187 W.Va. 337, 419 S.E.2d 1 (1992).

Charles R. McElwee, Robinson & McElwee, Charleston, for petitioners.

Marvin W. Masters, Richard A. Monahan, Masters & Taylor, L.C., Charleston, for respondents.

McHUGH, Chief Justice:

The petitioners, Arrow Concrete Co., Arrow Industries Corp., and Paul R. Burge, Jr., seek a writ of prohibition in order to prohibit the Honorable George W. Hill, Jr., Judge of the Circuit Court of Wood County, from enforcing an order compelling the petitioners to respond to the respondent's discovery requests. The petitioners are the defendants below and the respondent, On Target Concrete, Inc., is the plaintiff below (hereinafter we will refer to the parties as plaintiff and defendants). For reasons set forth below, we decline to issue a writ of prohibition.

I.

On July 18, 1994, the plaintiff filed a four-count complaint against the defendants in the Circuit Court of Wood County alleging violations of the West Virginia Antitrust Act set forth in W.Va.Code, 47-18-1, et seq., and alleging the common law claim of tortious interference with present and prospective business relations. The plaintiff and defendants are both in the business of manufacturing, selling and/or pouring concrete and related products in the State of West Virginia. ¹

On August 11, 1994, the defendants served their joint answer to the plaintiff's complaint as well as a counterclaim which alleged that the plaintiff had misappropriated confidential commercial information and tortiously interfered with the defendants' business.

Thereafter, the plaintiff sent interrogatories and a request for production of documents to the defendants. On August 19, 1994, the defendants filed objections to the plaintiff's discovery requests. On September 6, 1994, the plaintiff filed a motion to compel discovery, a motion for leave to submit additional interrogatories, and a motion for leave to amend the complaint to assert a claim pursuant to the Unfair Practices Act set forth in W.Va.Code, 47-11A-1, et seq.

At a hearing held on September 12, 1994, the trial judge made several rulings which were subsequently memorialized in an order dated October 4, 1994. That order granted all of the plaintiff's motions and ordered that "no party hereto or their counsel shall publish or make public, beyond the necessary scope and bounds of this litigation, nor make any use beyond the necessary scope and bounds of this litigation, confidential commercial and trade secret information of any party hereto." Also in that order the trial judge ordered the defendants to respond to the plaintiff's discovery requests by October 12, 1994. ²

On October 5, 1994, counsel for the defendants contacted counsel for the plaintiff and requested a forty-five to sixty-day extension of the October 12, 1994 deadline on the basis that an additional law firm had been recently hired to act as co-counsel for the defendants. The plaintiff's counsel agreed to a forty-five day extension, and on October 11, 1994, the trial judge entered a proposed order acknowledging the extension of the deadline.

On November 28, 1994, the defendants served their responses to the plaintiff's discovery requests. However, the defendants unilaterally contended that their responses to the discovery requests did not waive their previous objections or prohibit them from seeking further judicial protection or intervention. Additionally, the defendants stated that they were unable to fully respond to the discovery requests because the FBI and the IRS on October 19, 1994, executed a search warrant issued by the United States Magistrate Judge for the Southern District of West Virginia and seized business books and records of the defendants. The defendants indicated that when the books and records were returned they would more fully comply with the discovery requests. Thereafter, on December 22, 1994, the defendants filed a motion for suspension, reconsideration, and rescission of the October 4, 1994 discovery order and a motion to dismiss the complaint for failure to state a claim upon which relief can be granted, or in the alternative, for judgment on the pleadings.

The plaintiff contacted the U.S. Attorney's Office in March of 1995, in order to determine whether or not a procedure existed by which it could obtain the defendants' records that were being held by the government. By a letter dated March 20, 1995, an Assistant United States Attorney informed the plaintiff that it was the policy of the office to allow the persons from whom the records were obtained access to the records. The Assistant United States Attorney further indicated that the defendants could copy the records they needed at their expense. Additionally, by telephone the U.S. Attorney's Office informed the plaintiff that the defendants' computer records were in the defendants' possession since the government had taken only copies of the computer records. Based on the above letter and conversations with the U.S. Attorney's Office, the plaintiff filed a motion to compel a more complete response to the plaintiff's discovery requests on March 24, 1995.

On March 31, 1995, the circuit court denied the defendants' December 22, 1994 motion to dismiss the plaintiff's complaint for failure to state a claim upon which relief can be granted, or in the alternative for judgment on the pleadings. The circuit court also denied defendants' motion for rescission or suspension of the October 4, 1994 discovery order. The defendants thereafter filed the petition for writ of prohibition which is now before us.

II.

Although the petition is convoluted, it appears that the defendants are seeking a writ of prohibition for two reasons: (1) the discovery of business secrets should not be compelled since the plaintiff's complaint fails to state claims upon which relief can be granted; and (2) the discovery is not relevant and is too oppressive and burdensome and should, therefore, be limited by the trial judge. We are mindful that a writ of prohibition is rarely granted as a means to resolve discovery disputes: " 'A writ of prohibition is available to correct a clear legal error resulting from a trial court's substantial abuse of its discretion in regard to discovery orders.' Syllabus Point 1, State Farm Mut. Auto. Ins. Co. v. Stephens, 188 W.Va. 622, ...