Response to MTN to Strike

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION PAMELA WILLIAMS CARTHENS, LEVEN WEISS, J.D., CLARENCE PRESLEY II, ELLIS JEFFERSON, DARLENE COLLINS, TRACY FITZPATRICK, and ROBERT JOHNSON, on behalf of themselves and all others similarly situated,

Case No. 17-10097

Plaintiffs,

Hon. Laurie J. Michaelson

vs

CLASS ACTION

FCA US LLC, Defendant.

MILLER CANFIELD Jerome R. Watson (P27082) M. Misbah Shahid (P73450) Attorneys for Defendant 150 W. Jefferson Ave., Suite 2500 Detroit, MI 48226 (313) 963-6420 watson@millercanfield.com shahid@millercanfield.com

AKEEL & VALENTINE, PLC Shereef H. Akeel (P54345) Hasan Kaakarli (P81099) Adam Akeel (P81328) 888 W. Big Beaver Road, Suite 420 Troy, MI 48084 (248) 269-9595 shereef@akeelvalentine.com hasan@akeelvalentine.com adam@akeelvalentine.com

LITTLER MENDELSON, P.C. Daniel E. Turner (Ga No. 719330) Tasha K. Inegbenebor (Ga No. 382905) 3344 Peachtree Road N.E., Suite 1500 Atlanta, GA 30326 (404) 233-0330 dturner@littler.com tinegbenebor@littler.com

PITT, MCGEHEE, PALMER & RIVERS Michael L. Pitt (P24429) Cary S. McGehee (P42318) Robert W. Palmer (P31704) Beth M. Rivers (P33614) Megan A. Bonanni (P52079) i

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117 W. Fourth Street, Suite 200 Royal Oak, MI 48067 (248) 398-9800 mpitt@pittlawpc.com cmcgehee@pittlawpc.com rpalmer@pittlawpc.com brivers@pittlawpc.com mbonanni@pittlawpc.com

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Jacqueline Phipps Polito 375 Woodcliff Drive 2nd Floor Fairport, NY 14450 (585) 203-3400 jpolito@littler.com Attorneys for Defendant

Attorneys for Plaintiffs PLAINTIFFS’ RESPONSE TO DEFENDANT’S MOTION TO STRIKE REFERENCES IN THIRD AMENDED COMPLAINT PURPORTEDLY BASED ON FACTS UNLAWFULLY OBTAINED BY PLAINTIFFS NOW COME Plaintiffs, PAMELA WILLIAMS CARTHENS, LEVEN WEISS, J.D., CLARENCE, PRESLEY II, ELLIS JEFFERSON, DARLENE COLLINS, TRACY FITZPATRICK, and ROBERT JOHNSON, by and through their attorneys, AKEEL & VALENTINE, PLC, and PITT, MCGEHEE, PALMER, AND RIVERS, and hereby submit their response to Defendant’s Motion to Strike References in Third Amended Complaint Purportedly Based on Facts Unlawfully Obtained by Plaintiffs (“Motion”). For the reasons stated in their Brief in Support, Plaintiffs respectfully request that this Honorable Court DENY Defendant’s Motion in its entirety.

Respectfully submitted, AKEEL & VALENTINE, PLC /s/: SHEREEF H. AKEEL By: Shereef H. Akeel (P54345) ii

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Hasan Kaakarli (P81099) Adam Akeel (P81328) Attorneys for Plaintiffs 888 West Big Beaver Road, Ste. 420 Troy, MI 48084 (248) 269-9595 PITT, MCGEHEE, PALMER RIVERS, P.C. Michael L. Pitt (P24429) Cary S. McGehee (P42318) Robert W. Palmer (P31704) Beth M. Rivers (P33614) Megan A. Bonanni (P52079) 117 W. Fourth Street, Suite 200 Royal Oak, MI 48067 (248) 398-9800 Dated: March 18, 2019

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION PAMELA WILLIAMS CARTHENS, LEVEN WEISS, J.D., CLARENCE PRESLEY II, ELLIS JEFFERSON, DARLENE COLLINS, TRACY FITZPATRICK, and ROBERT JOHNSON, on behalf of themselves and all others similarly situated,

Case No. 17-10097

Plaintiffs,

Hon. Laurie J. Michaelson

vs

CLASS ACTION

FCA US LLC, Defendant.

AKEEL & VALENTINE, PLC Shereef H. Akeel (P54345) Hasan Kaakarli (P81099) Adam Akeel (P81328) 888 W. Big Beaver Road, Suite 420 Troy, MI 48084 (248) 269-9595 shereef@akeelvalentine.com hasan@akeelvalentine.com adam@akeelvalentine.com PITT, MCGEHEE, PALMER & RIVERS Michael L. Pitt (P24429) Cary S. McGehee (P42318) Robert W. Palmer (P31704) Beth M. Rivers (P33614) Megan A. Bonanni (P52079)

MILLER CANFIELD Jerome R. Watson (P27082) M. Misbah Shahid (P73450) Attorneys for Defendant 150 W. Jefferson Ave., Suite 2500 Detroit, MI 48226 (313) 963-6420 watson@millercanfield.com shahid@millercanfield.com LITTLER MENDELSON, P.C. Daniel E. Turner (Ga No. 719330) Tasha K. Inegbenebor (Ga No. 382905) 3344 Peachtree Road N.E., Suite 1500 Atlanta, GA 30326 (404) 233-0330 dturner@littler.com tinegbenebor@littler.com iv

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117 W. Fourth Street, Suite 200 Royal Oak, MI 48067 (248) 398-9800 mpitt@pittlawpc.com cmcgehee@pittlawpc.com rpalmer@pittlawpc.com brivers@pittlawpc.com mbonanni@pittlawpc.com

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Jacqueline Phipps Polito 375 Woodcliff Drive 2nd Floor Fairport, NY 14450 (585) 203-3400 jpolito@littler.com Attorneys for Defendant

Attorneys for Plaintiffs BRIEF IN SUPPORT OF PLAINTIFFS’ RESPONSE TO DEFENDANT’S MOTION TO STRIKE REFERENCES IN THIRD AMENDED COMPLAINT PURPORTEDLY BASED ON FACTS UNLAWFULLY OBTAINED BY PLAINTIFFS

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TABLE OF CONTENTS STATEMENT OF ISSUES PRESENTED……………………………………….vii TABLE OF AUTHORITIES…………………………………………………….viii CONTROLLING OR MOST APPROPRIATE AUTHORITY……………………x INTRODUCTION………………………………………………………………….1 RELEVANT FACTS……………………………………………………………….2 LAW AND ARGUMENT………………………………………………………….9 I.

THIS COURT HAS ALREADY ISSUED AN ORDER RESOLVING DEFENDANT’S MOTION BY TABLING IT FOR AN APPROPRIATE TIME……………………………………………………………………..9

II.

STRIKING ALLEGATIONS IN A PLEADING IS A DRASTIC MEASURE FOR CIRCUMSTANCES NOT SUPPORTED HERE…...10

III.

IF THIS COURT DETERMINES MARLIN DISCLOSED DEFENDANT’S TRADE SECRETS, PLAINTIFFS ARE PROTECTED

BY THE DTSA…………………………………………………………14 A. Defendant’s Reliance on Unpublished, Non-Binding, Out-of-State District Court Cases which are also Distinguishable should be rejected………………………………………………………………17

IV.

DOCUMENTS RECEIVED OUTSIDE OF THE CERJANEC AND ALLEN MATTERS ARE PROPERLY RELIED ON IN THOSE CASES………………………………………………………………….20

CONCLUSION…………………………………………………………………...21

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STATEMENT OF ISSUES PRESENTED 1. Should the Court deny Defendant’s Motion where it has already issued an Order resolving Defendant’s Motion by tabling it for an appropriate time?

PLAINTIFFS’ ANSWER:

YES

2. Should the Court deny Defendant’s Motion where its requested relief, including striking allegations in a pleading, is a drastic measure saved for circumstances not supported by the record?

PLAINTIFFS’ ANSWER:

YES

3. Should the Court deny Defendant’s Motion where it relies on unpublished, non-binding, out-of-state District Court cases that are distinguishable from the instant case and where Plaintiffs’ reliance on documents were protected by the Defend Trade Secrets Act? PLAINTIFFS’ ANSWER:

YES

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TABLE OF AUTHORITIES Cases

Page(s)

Agfa Photo USA Corp. v. Parham, 2007 WL 776503 (E.D.Tenn.2007)......................................................................22 Aqua Bay Concepts, Inc. v. Grosse Pointe Board of Realtors, 1992 WL 350275 (E.D.Mich.1992)…………………………........................22, 23 Bond v. Douglas Autotech Corp., 2005 WL 3359327 (W.D.Ky.2005)......................................................................22 Bradley J. Delp Revocable Tr. v. MSJMR 2008 Irrevocable Tr., 665 F. App’x 514 (6th Cir. 2016)....................................................................28, 29 Bridge C.A.T. Scan Associates v. Technicare Corp., 710 F.2d 940 (2d Cir.1983).............................................................................30, 31 Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819 (6th Cir.1953)......................................................................21, 24, 26 City of Pontiac Gen. Employees' Ret. Sys. v. Wal-Mart Stores, Inc., 2014 WL 11515512 (W.D. Ark. Mar. 10, 2014)............................................27, 28 Fayemi v. Hambrecht & Quist, 174 F.R.D. 319 (S.D.N.Y. 1997)...........................................................................29 Fed. Trade Comm'n v. Mazzoni & Son, 2007 WL 2413086 (E.D. Mich. 2007)..................................................................22 First Bank of Marietta v. Hartford Underwriters Ins. Co., 307 F.3d 501 (6th Cir. 2002).................................................................................21 Kirshner v. Uniden Corp. of America, 842 F.2d 1074 (9th Cir.1988)..........................................................................30, 31

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Kriss v. Bayrock Grp., 2015 WL 1305772 (S.D.N.Y. Mar. 23, 2015)......................................................28 Old Chief v. United States, 519 U.S. 172, 117 S.Ct. 644; 136 L.Ed. 2d 574 (1997)........................................23 Quintana v. Baca, 233 F.R.D. 562 (C.D. Cal. 2003)..........................................................................22 Roadway Express, Inc. v. Piper, 447 U.S. 752..........................................................................................................21 Rock Holdings, Inc. v. Certain Underwriters at Lloyd’s London, 2009 WL 2475400 (E.D. Mich. Aug. 11, 2009)...................................................22 Schlaifer Nance & Co. v. Estate of Warhol, 742 F. Supp. 165 (S.D.N.Y. 1990)........................................................................30 Statutes 18 U.S.C. § 1833(b).................................................................................................16 18 U.S.C. § 1833(b)(2)............................................................................................25 18 U.S.C. § 1833(b)(3)............................................................................................15 18 U.S.C. § 1839.....................................................................................................24 Rules Fed. R. Civ. P. 12(f).....................................................................................20, 21, 22 Fed. R. Civ. P. 12(f)(1)-(2)......................................................................................20

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CONTROLLING OR MOST APPROPRIATE AUTHORITY Fed. R. Civ. P. 12(f) 18 U.S.C. ยง 1833(b)

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INTRODUCTION Former class representative, Marlin Williams, is a whistleblower. As is typical treatment for whistleblowers, she has been vilified and attacked by her exemployer for performing the work for which she was hired and exposing unlawful conduct.

In the course of performing her job as a Diversity Manager – including developing a more diverse workforce as she had done with her prior employer – Marlin discovered the PLM evaluation system caused a disparate impact on African Americans and employees 55 and older. Just as she had done with her prior employer, Marlin helped create statistical reports to highlight this finding.

Marlin reported her findings to senior leadership and even in a company meeting that was primarily attended by African American FCA employees. Marlin was then ostracized and placed under investigation for alleged poor performance.

Unable to continue to work in such an environment, Marlin resigned and met an attorney with documents (as any client would have) showing the evidence of how she was discriminated and retaliated against. Suit was then filed. That is all that occurred.

Now, Defendant claims that Marlin had stolen alleged confidential and trade secret documents and shared them with Plaintiffs. This is simply untrue. But in response, in the exercise of abundance of caution, and pursuant to the Defend 1

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Trade Secrets Act – which explicitly protects whistleblowers – Plaintiffs’ counsel filed Marlin’s documents (that FCA claimed as trade secrets) under seal. To date, nothing has been shared with any other Plaintiff and the documents at issue have only been provided to opposing counsel.1 Defendant’s instant motion is misplaced and is an exercise of futility. First, this Court has already ordered that it will resolve this discovery issue after the first Scheduling Order. Additionally, the filed under-seal documents, referenced in Plaintiffs’ TAC (which Defendants only now take issue with despite the same references in earlier versions of the complaint and was not a basis for its earlier motions seeking dismissal), include information that is obtainable through discovery, and not protected by any privilege.

RELEVANT FACTS As described in Plaintiffs’ TAC, Marlin Williams was appointed Diversity Manager at Defendant FCA. (TAC ¶35). Marlin was tasked with discovering why the retention of African American employees was low and what could be done to remedy the company-wide problem. (TAC ¶36-39). Such an assignment was familiar to Marlin, as she had performed a similar role with her previous employer, Compuware. (TAC ¶8).

1

In fact, as later discussed and to further protect Williams from further unfounded allegations, Counsel also retained a forensic computer expert that captured all computer data in Williams’ devices to protect against accusations of alteration.

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With her experience, Marlin began her work analyzing FCA’s Performance and Leadership Management (“PLM”).2 Exh. A – Marlin Aff. ¶9-10. This led to Marlin investigating the PLM Scores awarded company-wide to salaried, nonunion Senior Managers, Senior Professionals, Mid-level Professionals, and Professionals (her similarly-situated class members). Exh. A – Marlin Aff. ¶11.

As part of her duties at FCA, Marlin found that FCA consistently rated African Americans and employees ages 55 and above at the bottom of the barrel in their year-end evaluations. Exh. A – Marlin Aff. ¶13-14. Specifically, Marlin found that African American employees, as well as employees over the age of 55, were issued low PLM Scores at a disproportionate rate when compared to their non-African American (or younger) counterparts. Exh. A – Marlin Aff. ¶15. With the help of an employee that does statistical work at FCA, a disparate impact analysis report was created. Exh. A – Marlin Aff. ¶10, 13.

After making this discovery, Marlin received permission from her supervisor to address this issue with senior leadership, as well as present the disparate impact analysis in a company meeting that was primarily attended by African American FCA employees. Exh. A – Marlin Aff. ¶16.

Afterwards, Williams began to receive backlash from her superiors. Exh. A – Marlin Aff. ¶18. She was accused of not performing certain duties, consistently This initial rating is herein referred to as a “PLM Rating” – contrast with the final year-end evaluation rating herein referred to as the “PLM Score”. (TAC ¶50, 58).

2

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frozen out of communications and placed under investigation. Marlin could see the writing on the wall that her time with FCA was coming to a close. Exh. A – Marlin Aff. ¶18.

In a cruel sense of irony, Marlin was terminated for doing her job – namely investigating the poor retention rate of minorities, including African American employees, at FCA. Exh. A – Marlin Aff. ¶21. After Marlin was terminated, she met with counsel to report and investigate a potential lawsuit against her former employer for discrimination on the basis of race (black or African American), as well as retaliation for reporting a suspected violation of law. Exh. A – Marlin Aff. ¶21.

Marlin gave her attorney, only, the statistics she helped create in the

execution of her duties as a Diversity Manager.

Exh. A – Marlin Aff. ¶24.

Importantly, none of these documents were marked, or in any way indicate, that they are work-product or attorney-client privileged documents. Exh. A – Marlin Aff. ¶23. In fact, the opposite is true – Marlin created these documents as part of her role and as requested by her supervisor (not an attorney) and in the ordinary course of business. Exh. A – Marlin Aff. ¶17.

On January 11, 2017, around one week following her termination, without disclosing or even citing any of the allegedly confidential or proprietary

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documents,3 Marlin filed suit as a class representative for discrimination against African American employees, as well as an individual count for retaliation for opposing FCA’s illegal activity.

(Dkts. 1, 3, 8).

FCA then continued4 its

retaliatory antics by threatening her with criminal and/or civil suit.

After Marlin filed a First Amended Complaint, on April 14, 2017, Defendant FCA’s counsel sent Plaintiffs’ counsel a letter alleging that Marlin stole documents that are “confidential and proprietary and also contain[] trade secrets, as defined by applicable law.” Exh. D – April 14 Letter. FCA further claimed the documents were “clearly labeled ‘attorney-client privileged’ and/or ‘attorney work product.’”

Exh. D – April 14 Letter. On April 17, 2017, Plaintiffs’ counsel wrote back to Defendant FCA stating, “to make it very clear, we have not relied on or even reviewed any documents allegedly marked as ‘attorney work product’ or ‘attorney

3

This is true for the following amended Complaints as well, as even admitted by Defendant’s counsel during a November 8, 2017 hearing on Defendant’s Motion to Dismiss Plaintiffs’ First Amended Complaint. Exh. B – 11/8/17 Hearing: The Court: What if they took that information and they put it in the pleadings?

They put it in their allegations?

Mr. Turner: They didn’t put specific information from that in their allegations or we would have been fighting at a different level.

4 On January 3, 2017, after terminating her, Defendant gave Marlin a threatening letter regarding the Economic Espionage Act which “imposes severe penalties for giving or receiving trade secrets by improper means. Penalties to individuals who violate the Act include fines of up to $5 million and jail terms of up to 15 years.”

Exh. C – Jan. 3 Letter. In violation of the DTSA, this letter does not include a notice to the employee of her rights under the DTSA. 18 U.S.C. § 1833(b)(3).

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client privileged’ information. And we certainly have not shared such alleged information with any other client in suit or in an administrative setting.”5 Exh. E – April 17 Letter.

The next day, Defendant accused Marlin of engaging in wrongs, including having documents that are privileged or work products, and are “also confidential and proprietary, and/or contains trade secrets as defined by law.” Exh. F – April 18 Letter. On April 19, 2017, Plaintiffs’ counsel advised Defendant that they are again wrongfully accusing Marlin of stealing documents, and reminded them that the Defend Trade Secrets Act of 2016 (“DTSA”), immunizes whistleblowers such as Marlin from adverse actions and authorizes her disclosure of suspected violations of law in confidence to her attorney. 18 U.S.C. § 1833(b). Marlin’s counsel also reminded Defendant that they are not in possession of any privileged or work-product documents, and the ones that were found were never relied on and were immediately sent back to Defendant. Exh. G – April 19 Letter.

Plaintiffs note that a presentation marked as ‘Diversity Council’ dated October 14, 2015, numbering 41 pages, had 12 pages marked as attorney/client privileged (pages 30-41). Exh. E – April 17 Letter. A second ‘Diversity Council’ presentation dated October 2015, numbering 47 pages, included 14 pages marked as attorney/client privileged (pages 5-7, 22, and 24-33). Exh. E – April 17 Letter.

However, no reference to an attorney is made on the cover pages and there were no markings that they are allegedly work product. Exh. E – April 17 Letter. In an abundance of caution, Plaintiffs did not review or rely on those documents and arranged for Defendant to pick them up (which they did a few days later). Exh. E – April 17 Letter. Plaintiffs’ counsel also urged Defendant to not destroy documentation supporting Plaintiffs’ claims or spoiling the evidence. Exh. E – April 17 Letter.

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On April 20, 2017, pursuant to the DTSA, Plaintiffs filed certain unprivileged and non-work product documents (documents Marlin created during the execution of her duties as Diversity Manager and not at the direction of an attorney) under seal. Dkts. 9 and 10. The following day, this Court issued a TextOnly Order that the “Court will address the issue of the sealed documents (R. 10) with the parties at the Scheduling Conference.”6 On August 15, 2017, Defendant sent Marlin’s counsel another letter again claiming that they have in their possession documents that “may well be confidential, proprietary, trade secrets” or otherwise privileged information. Exh. H – Aug. 15 Letter. Defendant did not raise this issue in their May 15, 2017 Motion to Compel Arbitration; Motion to Dismiss; and/or Motion to Strike Class Allegations in the Second Amended Complaint, (Dkt. 19), or their ensuing Reply, (Dkt. 30), but instead chose to continue making baseless allegations and threats to Marlin. Exh. I – Aug. 25 Letter. On August 28, 2017, Marlin or Plaintiffs’ counsel confirmed Defendant has “received all documents and records that Ms. [Marlin] Williams has provided to her counsel to-date”; that “no copies of the disputed attorney-client materials were retained”; and that Defendant “retain the

6

To date, no Scheduling Conference has been scheduled. Here, Defendant decided to flout this Court’s Order and take another bite out of the apple to strike the pleadings. For that reason alone, Defendant’s efforts fail, and the proper time to address this discovery issue is at the Scheduling Conference or as the Court orders otherwise.

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materials [] returned to you until the disputed claim of privilege could be resolved.” Exh. O – Aug. 28 Letter.

On September 6, 2017, almost six months after Plaintiffs’ Second Amended Complaint was filed, and in the exercise of extreme caution in advance of any Scheduling Order or discovery, counsel provided Defendant with material discovered after additional efforts were made by Marlin to find anything at her home, or otherwise in her possession, relating to her time at FCA. She located a flash drive which was last modified on August 23, 2016 (seven months before suit was filed); documents relating to Marlin’s diversity analysis created in the exercise of her duties as Diversity Manager; and a white envelope (with the label of alleged attorney-client privilege).

Exh. J – Sept. 6 Letter.

These materials were

immediately disclosed and sent to Defendant, only, and were not reviewed, or otherwise relied on, by Plaintiffs or its counsel.

Also, a document titled,

“affirmative action” with no label of privilege or work product was produced to Defendant only.

Exh. K – Sept. 8 Letter.

Despite Plaintiffs’ immediate

disclosures in advance of discovery and assurances that none of these documents were reviewed or relied on by Plaintiffs, Defendant continued its threats and mischaracterizations of Plaintiffs’ actions.

Exh. L – Sept. 20 Letter.

On

September 28, 2017, Plaintiffs’ counsel sent Defendant another letter advising Defendant to discontinue its threats against Marlin, as they are further acts of 8

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retaliation considering the DTSA protects a whistleblower like Marlin from Defendant’s instant conduct. Exh. M – Sept. 28 Letter.

Additionally, and at great expense to protect Marlin from unfounded allegations, on or around December 4, 2017, a forensic computer expert hired by Plaintiffs’ counsel preserved a mirror image of all of Marlin’s personal computer data on certain personal devices to freeze in time, up to then, all of Marlin’s electronic activity. Exh. N – Shereef Declaration. Defendant was made aware of this extra precaution taken. Exh. N – Shereef Declaration.

In sum, to date, no privileged or work product documents were relied on, or even reviewed, by Plaintiffs’ counsel; any and all alleged privileged or work product documents were returned to Defendant; only documents created in the execution of Marlin’s duties as Diversity Manager were filed under seal; and none of the documents were shared with any other plaintiff or putative class member in this case or the related Cerjanec/Allen matters.

LAW AND ARGUMENT I.

THIS COURT HAS ALREADY ISSUED AN ORDER RESOLVING DEFENDANT’S MOTION BY TABLING IT FOR AN APPROPRIATE TIME. This Court has already made a ruling regarding Defendant’s instant motion.

Not only is Defendant’s Motion premature, it also contravenes this Court’s Order

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that it will “address the issue of the sealed documents (R. 10) with the parties at the Scheduling Conference.”

Defendant’s Motion accuses Marlin of misconduct in her acquisition of the documents referenced in the Motion. Although Plaintiffs object to Defendant’s characterization in the strongest terms, this, too, is a fact issue. Furthermore, Plaintiffs went to great lengths – and expenditure – to freeze the universe of data in Marlin’s devices. Indeed, Plaintiffs’ expert, Kevin Clarke, also created a full report of Marlin’s devices and can detail the movement of documents in Marlin’s emails and hard drive.

II.

STRIKING ALLEGATIONS IN A PLEADING IS A DRASTIC MEASURE FOR CIRCUMSTANCES NOT SUPPORTED HERE. In support of its motion, Defendant relies on Fed. R. Civ. P. 12(f) which

states that “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The rule further states that the court may act “on its own” or “on motion made by a party either before responding to the pleading…” Fed. R. Civ. P. 12(f)(1)-(2). Here, Defendant has had a prior opportunity to raise this motion (prior to responding to Plaintiffs’ Second Amended Complaint), yet failed to do so. Recognizing its failure to raise

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this issue in a timely manner, Defendant relies on the inherent powers of this Court to determine whether to strike portions of Plaintiffs’ Complaint.7 Defendant argues that 29 of the allegations in Plaintiffs’ Third Amended Complaint must be stricken, even though there is no citation to any privileged or work-product documents, nor any reference to a “redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). This drastic measure is unsupported by binding case law.

The Sixth Circuit has stated that “[p]artly because of the practical difficulty of deciding cases without a factual record it is well established that the action of striking a pleading should be sparingly used by the courts. It is a drastic remedy to be resorted to only when required for the purposes of justice. The motion to strike should be granted only when the pleading to be stricken has no possible relation to the controversy.” Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir.1953). Further, the “imposition of inherent power sanctions requires a finding of bad faith,” First Bank of Marietta v. Hartford Underwriters Ins. Co., 307 F.3d 501, 517 (6th Cir. 2002), or conduct “tantamount to bad faith”.

Roadway Express, Inc. v. Piper, 447 U.S. 752, 767.

It should be noted that Defendant relies primarily on cases outside of this Court’s jurisdiction, mostly unpublished, and oftentimes from other Circuit’s District Courts for its arguments.

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District courts in this circuit have concluded that a district court should not strike a matter “unless the court can confidently conclude that the portion of the pleading to which the motion is addressed is redundant or is both irrelevant to the subject matter of the litigation and prejudicial to the objecting party.” Aqua Bay Concepts, Inc. v. Grosse Pointe Board of Realtors, 1992 WL 350275 at *2 (E.D.Mich.1992); see also Agfa Photo USA Corp. v. Parham, 2007 WL 776503 at *2–3 (E.D.Tenn.2007); Bond v. Douglas Autotech Corp., 2005 WL 3359327 (W.D.Ky.2005); Rock Holdings, Inc. v. Certain Underwriters at Lloyd’s London, No. 09-11599, 2009 WL 2475400, at *4 (E.D. Mich. Aug. 11, 2009).8 “These motions are ‘generally regarded with disfavor because of the limited importance of pleading in federal practice, and because they are often used as a delaying tactic.’”

Fed. Trade Comm'n v. Mazzoni & Son, 2007 WL 2413086, 2 (E.D. Mich.

2007)(quoting Quintana v. Baca, 233 F.R.D. 562, 564 (C.D. Cal. 2003)).

Here, Defendant’s arguments amount to nothing more than a delay tactic filed simultaneously with its instant Motion to Dismiss Plaintiffs’ Third Amended Complaint. Simply put, there is no reason to strike any of the allegations in Plaintiffs’ TAC, let alone one that is “redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Moreover, if that were the case, this

8

All unpublished cases are attached as Exh. P and in alphabetical order.

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Court has already Ordered that it “will address the issue of the sealed documents (R. 10 ) with the parties at the Scheduling Conference.” 4/21/17 Text-Only Order.

Additionally, Defendant does not argue that the pleadings in Plaintiffs’ TAC are “redundant or [are] both irrelevant to the subject matter of the litigation and prejudicial to the objecting party.” Aqua, supra (emphasis added). This is because the pleadings at issue are highly relevant to the subject matter of this instant litigation. Specifically, they include allegations that are actually questions of law (¶ 93 and 100), common/public knowledge (¶ 88 and 107), and/or are easily discoverable during discovery using simple document production requests, depositions, and/or affidavits (¶ 40-41, 62, 67-72, 86, 94, 105-107, 109, 117, 123124, 127, 129, 135, 140-141, 147, 149, and 155).

Furthermore, there is no

prejudice to Defendant because Plaintiffs’ do not cite to any alleged privileged or work product documents, nor have they even reviewed such documents. The only documents that are referenced in Plaintiffs’ TAC are documents Marlin created in the execution of her duties, and as requested by her non-lawyer supervisor well before litigation was a possibility, and disclosed only to her attorneys, Defendant’s counsel, and this Court under seal in an effort to investigate her suspected violations of law. To the extent Defendant’s argue these non-privileged and nonwork product documents are prejudicial, it is well established that “Virtually all

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evidence is prejudicial or it isn’t material.” Old Chief v. United States, 519 U.S. 172, 193; 117 S.Ct. 644; 136 L.Ed. 2d 574 (1997).

Defendant cannot show that the record supports the drastic remedy it seeks.

Brown & Williamson Tobacco Corp., 201 F.2d at 822. As such, Defendant’s Motion should be denied.

III.

IF THIS COURT DETERMINES MARLIN DISCLOSED DEFENDANT’S TRADE SECRETS, PLAINTIFFS ARE PROTECTED BY THE DTSA.

Repeatedly, in the letter exchanges between Defendant and Plaintiffs regarding the documents Marlin disclosed to her attorney, Defendant accuse Marlin of misappropriating “trade secrets”. Under the DTSA: (3) The term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if – (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information[.]

18 U.S.C. § 1839.

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If this Court agrees with Defendant’s characterization that the documents in question in their letters to Plaintiffs’ counsel are, in fact, trade secrets, Marlin – and the Plaintiffs in this case – are immunized under the plain language of the statute.

In their Brief, Defendant correctly cites that the DTSA provides immunity for the “[u]se of trade secret information in anti-retaliation lawsuit.”

18 U.S.C. §

1833(b)(2). Such use is allowed when “[a]n individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual – (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

18 U.S.C. 1833(b)(2).

Here, Marlin – and Plaintiffs’ counsel – followed the plain language of the law. As described above, Marlin originally filed this lawsuit alleging retaliation by Defendant against her individually for her reporting of suspected violations of the law, in addition to her class allegations. These same allegations were made in the Amended Complaints that followed. Further, the DTSA permits her and Plaintiffs’ counsel to “use” the trade secret information, as long as she files the documents under seal – which she did on April 20, 2017 – and has disclosed the documents with her counsel, the Court, and Defendant, only, and in compliance with the law.

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Marlin’s disclosure is also in line with the legislative intent of the law.

Senator Charles Grassley, co-sponsor of the whistleblower protection amendments of the DTSA, spoke to the heart of the Act as follows: Too often, individuals who come forward to report wrongdoing in the workplace are punished for simply telling the truth. The amendment I championed with Senator Leahy ensures that these whistleblowers won’t be slapped with allegations of trade secret theft when responsibly exposing misconduct. It’s another way we can prevent retaliation and even encourage people to speak out when they witness violations of the law.9 Senator Leahy added that, Whistleblowers serve an essential role in ensuring accountability. It is important that whistleblowers have strong and effective avenues to come forward without fear of intimidation or retaliation. The amendment I authored with Senator Grassley takes another important step in our bipartisan efforts to protect whistleblowers and promote accountability.10 Marlin’s disclosure – through Plaintiffs’ counsel – was lawful and protected under the DTSA, if this Court considers the documents filed under seal to be trade secrets. Plaintiffs even went the length of hiring a forensic expert to capture Marlin’s device data and enable the creation of a forensic analysis report.

Meanwhile, FCA has not come forward with any particulars, including its own

9

See Press Release, Office of Senator Chuck Grassley, Leahy-Grassley Amendment Protecting Whistleblowers Earns Unanimous Support in Judiciary Committee (Jan. 28, 2016), https://www.grassley.senate.gov/news/newsreleases/leahy-grassley-amendment-protecting-whistleblowers-earns-unanimoussupport [https://perma.cc/J2L3-R56Q].

10 Id. 16

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forensic analysis, to support its assertions of improper actions by Marlin or by counsel. There is no basis for Defendant’s assertions that Marlin or her counsel misrepresented the nature or scope of the materials in their possession, or that they have misappropriated or misused confidential and/or trade secret information belonging to FCA. Defendant’s Motion must be denied.

A. Defendant’s Reliance on Unpublished, Non-Binding, Out-of-State District Court Cases which are also Distinguishable should be rejected.

On page 13 of their Brief, Defendant claims that City of Pontiac Gen. Emps’ Ret. Sys. v. Wal-Mart Stores, Inc. is analogous to our case and supports the assertion that “courts have relied on their inherent power to strike stolen documents.” 2014 WL 11515512 (W.D. Ark. Mar. 10, 2014). It is not analogous.

The Wal-Mart case was a securities fraud claim premised on allegations of bribery

by Walmart officials to obtain permits to build stores in Mexico, not retaliation like Marlin’s claims which implicate the DTSA. Defendant Wal-Mart asked the court to strike ten documents that were sent to Plaintiffs’ attorneys anonymously after they were stolen by a former employee, who was not involved in the litigation in any way.

Wal-Mart, Dkt. 161, January 30, 2015 Order (attached as part of

Defendant’s Exhibit 14). Moreover, in that case, the plaintiff had attached and cited excerpts from the documents in the complaint and a declaration filed in response to a motion. Here, Plaintiffs have neither cited nor attached documents to the complaint. The documents have only been filed under seal pursuant to the 17

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DTSA. Wal-Mart simply sought to have the documents stricken from the “public record.” Here, the challenged documents are not in the public record. The court subsequently ordered Plaintiffs to return documents but acknowledged that the plaintiffs could request those same documents through discovery. Id. Thus, if this Court does find any relevance in this case, it is that the Plaintiffs should be able to request the sealed/disputed documents through discovery.

Defendant also relies on the holding of another out-of-Circuit, unpublished, District Court case, without considering the facts of the case. Kriss v. Bayrock Grp., 2015 WL 1305772 (S.D.N.Y. Mar. 23, 2015). Kriss involved a RICO action against the defendants – not a retaliation claim that would invoke the DTSA protections. Additionally, the documents at issue there were all work-product and privileged and were subject to a criminal prosecution against the non-party who had allegedly stolen them. There, the court sanctioned the plaintiffs for their repeated failure to provide independent public sources for allegations in the complaint. The sealed documents in question in this instant action do not include either privileged or work-product documents.

Nor were any privileged/work-

product documents even reviewed before drafting Plaintiffs’ Complaints.

Ultimately, the court in Kriss ordered that the allegations in the complaint that were derived from information taken from a criminal case against one of the

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defendants be struck “[b]ecause Plaintiffs repeatedly failed to comply with – even defied – Judge Maas’ orders…” Id. at *2. This holding has no application here.

Another case Defendant relies on to support its position includes Bradley J. Delp Revocable Tr. v. MSJMR 2008 Irrevocable Tr., 665 F. App’x 514 (6th Cir. 2016). In Bradley, the person who stole the documents no longer worked for his employer and “on at least four occasions” snuck into a co-owners office to retrieve those documents. Id. at 522. The “‘stolen’ documents contained Defendants’ attorney-client communications, Defendants’ counsel’s legal analyses and memoranda, and detailed conference call agendas of attorney calls pertaining to this action.” Id. at 516. Finally, the court in Bradley “had reviewed the documents and determined that they had been accurately classified as privileged and confidential.” Id. at 517.

Similarly, Defendant relies on Spencer v. Pottstown Sch. Dist., F. Supp. 3d 635 (E.D. Pa. 2018) and Fayemi v. Hambrecht & Quist, 174 F.R.D. 319 (S.D.N.Y. 1997), even though the plaintiffs in those cases stole documents from another person’s emails that were privileged and work-products of attorneys, (Spencer, F. Supp. 3d at 637, 644), and snuck into a former supervisor’s locked office on a Sunday morning and printing documents from his computer. Fayemi, 174 F.R.D. at 322. Still, in Fayemi, the court denied the motion for sanctions. Id. at 327.

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In this case, Marlin did not sneak into anyone’s office to steal privileged documents, nor did Plaintiffs rely on any privileged/work-product documents in their Complaints. Additionally, this Court has Ordered that it will address the documents filed under seal at the Scheduling Conference, which is yet to occur.

IV.

DOCUMENTS RECEIVED OUTSIDE OF THE CERJANEC AND ALLEN MATTERS ARE PROPERLY RELIED ON IN THOSE CASES.

Defendant argues that Plaintiffs’ improperly disseminated the documents in question to the plaintiffs in the Cerjanec and Allen matters. Def. Brief, pp. 11-12.

However, cases have held there may be no basis for a court to exercise control over information obtained outside of the discovery process. For example, in Kirshner v.

Uniden Corp. of America, 842 F.2d 1074 (9th Cir.1988), the court held that it was inappropriate to require the return of documents purportedly subject to the attorney-client privilege which the plaintiff's attorney had acquired in discovery in separate litigation against the same defendant. Id. at 1076. The court concluded that “a district court’s power to control discovery does not extend to material discovered in a separate action, notwithstanding the fact that the parties were identical.” Id. at 1081. Similarly, in Bridge C.A.T. Scan Associates v. Technicare Corp., 710 F.2d 940, 944–45 (2d Cir.1983), the Second Circuit found no authority for enjoining the disclosure of the defendant’s trade data that had been collected by the plaintiff's attorney prior to instituting the lawsuit. Id. at 945–46. Because the 20

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information had been “gathered independently of judicial process,” the court could not exercise control over it. Id. at 946.

In Schlaifer Nance & Co. v. Estate of Warhol, 742 F. Supp. 165, 166 (S.D.N.Y. 1990), the court characterized Bridge as holding that “[n]either the Federal Rules of Civil Procedure nor courts’ inherent powers support an order prohibiting use of information innocently obtained from third parties without use of judicial process.” (Emphasis added). Indeed, the court in Bridge specifically found that the party seeking the protective order had presented no evidence that its adversary had obtained the information wrongfully. Bridge, 710 F.2d at 946–47.

Similarly, in Kirshner, the plaintiff had engaged in no wrongdoing, but had simply secured the contested documents through discovery in another case. Kirshner, 842 F.2d at 1076.

Here, the documents disclosed to Plaintiffs’ counsel, which is the same in the Cerjanec and Allen matters, obtained the documents through no wrongdoing of their own and prior to instituting a lawsuit against Defendant in those cases. Thus, the Cerjanec and Allen matters are properly within their right to plead their complaints as they are.

CONCLUSION For the foregoing reasons, Plaintiffs’ respectfully request this Court DENY Defendant’s Motion in its entirety.

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Respectfully submitted,

Dated: March 18, 2019

AKEEL & VALENTINE, PLC By: /s/: SHEREEF H. AKEEL Shereef H. Akeel (P54345) Hasan Kaakarli (P81099) Adam Akeel (P81328) Attorneys for Plaintiff 888 W. Big Beaver Road, Ste. 420 Troy, MI 48084 (248) 269-9595 shereef@akeelvalentine.com hasan@akeelvalentine.com

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