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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, Plaintiffs, Case No. 17-10097 vs. FCA US LLC,
Hon. Laurie J. Michelson Oral Argument Requested
Defendant. __________________________________________________________________ AKEEL & VALENTINE, PLC Shereef H. Akeel (P54345) Hasan Kaakarli (P81099) Adam S. Akeel (P81328) 888 W Big Beaver Road, Suite 910 Troy, MI 48084 (248) 269-9595 shereef@akeelvalentine.com hasan@akeelvalentine.com adam@akeelvalentine.com PITT, McGEHEE, PALMER & RIVERS, PC Michael L. Pitt (P24429) Cary S. McGehee (P42318) Robert W. Palmer (P31704) Megan A. Bonanni (P52079) 117 W. Fourth Street, Suite 200 Royal Oak, MI 48067 248-398-9800 mpitt@pittlawpc.com cmcgehee@pittlawpc.com rpalmer@pittlawpc.com mbonanni@pittlawpc.com Attorneys for Plaintiffs
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. Jerome R. Watson (P27082) M. Misbah Shahid (P73450) 150 West Jefferson, Suite 2500 Detroit, Michigan 48226 (313) 963-6420 / fax 313 496-7500 watson@millercanfield.com shahid@millercanfield.com LITTLER MENDELSON, P.C. Daniel E. Turner (Ga. Bar No. 719330) Jacqueline Phipps Polito (NY Bar No. 2582690) Tasha K. Inegbenebor (Ga. Bar. No. 382905) 3344 Peachtree Road N.E., Suite 1500 Atlanta, GA 30326 (404) 233-0330 dturner@littler.com jpolito@littler.com tinegbenebor@littler.com Attorneys for Defendant
DEFENDANT’S REPLY IN SUPPORT OF ITS MOTION TO STRIKE REFERENCES IN THIRD AMENDED COMPLAINT PURPORTEDLY BASED ON FACTS UNLAWFULLY OBTAINED BY PLAINTIFFS
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Far from disputing the allegations raised, Plaintiffs’ response and declarations concede the pertinent facts pertaining to Marlin Williams’ (“M. Williams”) theft of FCA US LLC’s (“FCA US”) property. Plaintiffs admit that: (1) M. Williams, in violation of the terms of her confidentiality agreement with FCA US, took with her for her own purposes hundreds of documents containing FCA US’ confidential information and not just those the Plaintiffs’ counsel filed under seal, including privileged documents, and that both M. Williams and her counsel have been using the stolen documents to support the instant lawsuit as well as other litigations that she has never been part of: the Cerjanec, Allen, and Thibodeau matters; (2) the information she took does not fall within the definition of “trade secret” in the Defend Trade Secrets Act (“DTSA”); and (3) even if it did, M. Williams is no longer a plaintiff in this or any other matter before this Court and the DTSA is inapplicable. While Plaintiffs obscure the scope of M. Williams’ misconduct by focusing on the few stolen documents filed under seal, M. Williams does not deny continuing to hold a substantial amount of FCA US’ information beyond the documents filed under seal and taken prior to her resignation.1 I.
M. WILLIAMS’ THEFT IS UNDISPUTED Plaintiffs and M. Williams repeatedly admit that M. Williams took
confidential documents, data, and/or property immediately prior to her resignation 1
Contrary to Plaintiffs assertion, M. Williams was not terminated – she resigned from her employment at FCA US. See, Dkt. 8, ¶67. 1
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from FCA US and do not deny that she tried to hide her tracks. See Dkt. 56 at 11, 14, 19, 23, 25, 30; Dkt. 56-2 ¶ 21. Notably, M. Williams’ and Plaintiffs’ Counsel Shereef Akeel’s declarations do not refute (and nowhere in Plaintiffs’ response do they deny) (1) that M. Williams signed a confidentiality agreement preventing her from using, retaining or disclosing any of FCA US’ “secrets, proprietary, or confidential information” (Dkt. 50-2 ¶ 5) or that she was provided with a Confidentiality Memorandum reiterating her obligations post-employment (Dkt. 50-2 at 13); (2) that M. Williams violated her contractual obligations by taking FCA US’ property without authorization; (3) that M. Williams also forwarded to her private email accounts hundreds of emails and documents, many of which were clearly marked as confidential and some that included privileged information; and (4) that M. Williams attempted to conceal her misconduct by double-deleting her emails.
M. Williams and Plaintiffs also admit that FCA US’ confidential
documents, data, and/or property were provided to Mr. Akeel, who then used the stolen information in this lawsuit. Dkt. 56 at 23; Dkt. 56-2 ¶¶ 21-23. Given these admissions, there is no dispute that M. Williams engaged in willful violation of her contractual obligations, which by itself is grounds for action by this Court. II.
THE COURT HAS AUTHORITY TO EXERCISE CONTROL OVER DOCUMENTS STOLEN OUTSIDE OF THE DISCOVERY PROCESS Plaintiffs cannot dispute that this Court has the authority to address the theft
of documents by an employee who (along with their counsel) seek to use them in a 2
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lawsuit.
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Plaintiffs’ argument that some of the documents may be subject to
discovery is a red herring.
First, Plaintiffs do not dispute that privileged
documents were stolen, which would never be subject to discovery. Second, M. Williams may continue to retain stolen hard copy or electronic material, and there is no indication whatsoever whether such material would be discoverable. Finally, whether the documents may or may not later be discoverable does not change the significance of their theft by M. Williams and improper use by Plaintiffs and Plaintiffs’ counsel in this and other lawsuits. See citations Dkt. 50 at 26-30. No case Plaintiffs cite stands for the proposition that the Court is powerless to act when litigants seek to profit from such egregious misconduct.2 And here M. Williams is no longer a plaintiff, nor was she ever a plaintiff in the other cases in
2
Kirshner v. Uniden Corp. of Am., 842 F.2d 1074, 1081 (9th Cir. 1988) is inapposite. There, the court ruled that Rule 26(c) does not empower a district court to order a party to return privileged documents obtained by his attorney through discovery in a separate action brought by another person against the same defendant. The documents in the instant case, however, were not obtained through discovery in a separate action; they were stolen, in a blatant breach of trust and of explicit confidentiality undertakings. Similarly, Bridge C.A.T. Scan Assocs. v. Technicare Corp., 710 F.2d 940 (2d Cir. 1983) is inapplicable. The plaintiff in Bridge, unlike here, did not violate a confidentiality agreement. The court noted that equitable relief for the defendant would be considered if, as M. Williams did, “a party has obtained [documents] by breaching its confidential [agreement].” Id. at 946. Bridge also dealt with trade secrets, which are not at issue here. Schlaifer Nance & Co. v. Estate of Warhol, 742 F. Supp. 165 (S.D.N.Y. 1990) also does not support Plaintiffs’ arguments because the information at issue was not “innocently obtained from third parties without use of judicial process.” 742 F. Supp. at 166. M. Williams does not deny that her actions violated the confidentiality agreement. 3
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which counsel has injected purloined materials. This Court has authority to rule.3 III.
THE INSTANT MOTION IS RIPE FOR REVIEW It is correct that in April 2017, this Court contemplated addressing the sealed
documents at a future Scheduling Conference, but in no way did the Court foreclose the issue if circumstances changed. Since then, M. Williams and others have been dismissed. This Motion deals not only with the documents filed under seal, but the hundreds of documents, data, and/or property that it now is apparent M. Williams stole in violation of her confidentiality obligations. Plaintiffs cite to no authority restricting the Court from reaching these issues now, as there is none. To the contrary, the plain language of Rule 12(f) allows this Motion.4 Plaintiffs’ effort to claim a right to retain stolen property because it was filed under seal and because it is allegedly not privileged or work product is meritless. First, contrary to their argument, Plaintiffs admit that certain of the documents, 3
See Spencer v. Pottstown Sch. Dist., 292 F. Supp. 3d 635, 642-643 (E.D. Pa. 2018) (court may exercise its inherent power to preclude a party’s use of evidence improperly obtained outside the discovery process); Fayemi v. Hambrecht & Quist, Inc., 174 F.R.D. 319, 324-325 (S.D.N.Y. 1997) (distinguishing Kirshner, Bridge and Schlaifer, holding that a court may exercise its inherent powers to sanction a party seeking to use wrongfully obtained evidence). 4
FCA US also relies on the Court’s inherent power to provide the relief sought. Although Plaintiffs attempt to distinguish the specific facts of the cases Defendant cites in its brief (see Dkt. 50 at 27-29), Plaintiffs ignore that FCA US cited these cases for the proposition that courts have exercised their inherent power in order to protect the orderly administration of justice and maintain the authority and dignity of the court, especially when confidential and proprietary information was improperly obtained and relied on to support parties’ claims. 4
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data, and/or property M. Williams stole and provided to her counsel are clearly labeled attorney-client privilege or confidential. See Dkt. 56-2 ¶27. Second, Plaintiffs entirely ignore the hundreds of other records she stole and intentionally attempted to double-delete from FCA US’ system, which are not filed under seal. See Dkt. 50 at 23-24.
The agreements M. Williams signed govern stolen
information regardless of whether they are “trade secrets” or “privileged.” They are property of FCA US and are “proprietary” and “confidential.” Dkt. 50-2 ¶5. Finally, Plaintiffs’ argument that “the only documents that are referenced ... are documents Marlin created in the execution of her duties…” is irrelevant. (Dkt. 56 at 23). That she may have created documents during her employment confirms that they are property of FCA US, not M. Williams, and their confidential status is not altered by the alleged fact that M. Williams was involved in their creation. IV.
THE DEFEND TRADE SECRETS ACT DOES NOT PROVIDE IMMUNITY TO M. WILLIAMS OR THE NAMED PLAINTIFFS Plaintiffs’ attempt to use the DTSA to excuse their conduct is groundless, as
the statute simply does not apply here. First, the statute provides immunity from liability only for the confidential disclosure of a trade secret under limited circumstances.5 None of the documents M. Williams filed under seal or that have
5
The DTSA defines a trade secret as: “[a]ll forms and types of financial, business, scientific, technical, economic, or engineering information … 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 5
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been returned contain trade secrets. Indeed, Plaintiffs do not even argue that the documents contain information that derives independent economic value from not being generally known and cite no law supporting such a finding.6 Second, even if the documents filed under seal or that have been returned to FCA US were trade secrets, which they are not, neither immunity provision applies. 18 U.S.C. § 1833(b)(1) does not apply to M. Williams or the Plaintiffs because FCA US is not seeking to hold them “criminally or civilly liable” for disclosure of a trade secret as the DTSA requires.
Furthermore, 8 U.S.C. §
1833(b)(2) states that an individual may use trade secret information in a court proceeding only in a “lawsuit for retaliation” and no such claims is being made here. Dkt. 50-14 at 16. The Third Amended Complaint (“TAC”) is void of any claim of retaliation and M. Williams is no longer a party (nor was she ever a proper party).7
Rather, Plaintiffs seek to use the proprietary documents, data and/or
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(3). The Michigan Uniform Trade Secrets Act similarly defines “trade secret.” See M.C.L. 445.1902(d). 6
Plaintiffs also mischaracterize FCA US’ counsel’s communications seeking the return of the stolen material, none of which definitively characterized the stolen documents, data, and/or property in M. Williams’ possession as “trade secrets.” The letters Plaintiffs cited stated that the documents may contain trade secret information but also noted the limits of counsel’s knowledge because of M. Williams’ refusal to return what she took. See Dkt. 56-7 at 3. 7
While previous complaints contained a retaliation claim, it applied only to M. Williams and not to the other Plaintiffs or class claims. Dkts. 1, 3, and 8. Even 6
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property stolen by M. Williams, a former plaintiff, to support non-retaliation class claims. Moreover, while M. Williams declares that she did not share any of the sealed, confidential or privileged documents with “any other plaintiffs in the FCA [US] cases before this Court” (Dkt. 56-2 ¶¶ 24-25), the allegations in the TAC, the complaints in Cerjanec and Thibodeau, and the final complaint in Allen incorporate those materials. Plaintiffs’ counsel also admits that the allegations in Cerjanec are based upon the stolen documents. (Dkt. 50 at 16). Nothing in the DTSA provides protection to M. Williams or her counsel for sharing stolen documents with other current or former employees to create litigation to which M. Williams is not even a party.8 Plaintiffs cannot be allowed to use the stolen proprietary documents, data, and/or property as they have done, nor can M. Williams continue to hide the extent of her misconduct. Respectfully submitted, /s/Jerome R Watson (P27082) Miller, Canfield, Paddock and Stone, P.L.C. Attorney for Defendant watson@millercanfield.com April 1, 2019
/s/ Daniel E. Turner (Ga. Bar No. 719330) Littler Mendelson, P.C. Attorney for Defendant dturner@littler.com
then, the fact that the documents are not trade secrets would prohibit the applicability of 18 U.S.C. § 1833(b)(2). 8
See Dkt. 50-13, PgID 1576 (The immunity provision “immunizes the act of disclosure in the limited circumstances set forth in the provision itself; it does not immunizes [sic] acts that are otherwise prohibited by law, such as the unlawful access of material by unauthorized means.”) 7
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CERTIFICATE OF SERVICE I hereby certify that on April 1, 2019, I electronically filed the foregoing paper with the Clerk of the Court using the ECF system which will send notification of such filing to: Shereef H. Akeel Hasan Kaakarli Adam S. Akeel Michael L. Pitt Megan A. Bonanni Robert W. Palmer Carey S. McGehee Beth M. Rivers
shereef@akeelvalentine.com hasan@akeelvalentine.com adam@akeelvalentine.com mpitt@pittlawpc.com mbonanni@pittlawpc.com rpalmer@pittlawpc.com cmcgehee@pittlawpc.com brivers@pittlawpc.com /s/Jerome R Watson (P27082) Miller, Canfield, Paddock and Stone, P.L.C. Attorney for Defendant 150 West Jefferson, Suite 2500 Detroit, Michigan 48226 (313) 963-6420 watson@millercanfield.com
33271139.10\155704-00005
8