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Merz North America, Inc. v. Viveve Medical Inc.

United States District Court, E.D. North Carolina, Northern Division

May 5, 2017

MERZ NORTH AMERICA, INC., Plaintiff,
v.
VIVEVE MEDICAL INC., VFVEVE, INC., SEAN SHAPIRO, and TRACY ANDORA, Defendants.

          ORDER

          James E. Gates United States Magistrate Judge

         This case comes before the court on the emergency motion filed by plaintiff Merz North America, Inc. ("plaintiff) (D.E. 10) for an order allowing it to take expedited discovery prior to conducting a conference pursuant to Rule 26(f) of the Federal Rules of Civil Procedure and an order requiring the preservation of evidence by defendants. For the reasons set forth below, the motion will be allowed in part and denied in part.

         BACKGROUND

         In its complaint, plaintiff alleges that its former sales executives, defendants Sean Shapiro ("Shapiro") and Tracy Andora ("Andora"), signed nondisclosure and nonsolicitation agreements as a condition of employment with plaintiff. See Compl. (D.E. 1) ¶¶ 5, 7. Shapiro and Andora voluntarily resigned from employment with plaintiff and joined defendant Viveve, Inc. ("Viveve") in its sales leadership team. Id. ¶¶ 37, 41. Plaintiff alleges that Viveve, with Shapiro and Andora's assistance, has unfairly used knowledge and information about plaintiffs customer relationships for the benefit of Viveve and defendant Viveve Medical, Inc.[1] ("Viveve Medical"). Id. ¶¶ 43, 44. Plaintiff further contends that Viveve continues to interfere with plaintiffs contractual and business relations by soliciting and hiring plaintiffs employees. Id. ¶ 51. Plaintiff asserts claims for breach of contract against Shapiro and Andora (id. ¶¶ 56-62); misappropriation and/or threatened disclosure of trade secrets against all defendants (id ¶¶ 63-70); tortious interference with contractual relations against Viveve and Viveve Medical (id. ¶¶ 71-77); and unfair trade practices against all defendants (id. ¶¶ 78-84).

         Plaintiff has moved for a temporary restraining order ("TRO") (D.E. 3) prohibiting Shapiro and Andora from soliciting its employees or using its confidential, trade secret, and business information, and preventing Viveve and Viveve Medical from assisting any such breaches and utilizing unfair practices to recruit Merz employees. No hearing on the motion for a TRO has been scheduled.

         In the instant motion, plaintiff seeks leave to serve eight expedited requests for production of documents (D.E. 10-1) and two expedited interrogatories (D.E. 10-2) on each Shapiro and Andora, and seven expedited requests for production of documents (D.E. 10-3) and one expedited interrogatory (D.E. 10-4) on Viveve. Plaintiff requests that defendants be directed to respond to the discovery requests within five business days of service. It also seeks a directive requiring all defendants to preserve evidence relevant to the subject matter of the complaint and to prohibit all defendants from using, accessing, tampering with, or destroying any documents relating to Viveve or other Merz employees. Defendants, who appeared through counsel after the motion was filed, have filed a memorandum (D.E. 22) in opposition to the motion.[2]

         DISCUSSION

         Generally, discovery is not permitted until after the parties have conferred pursuant to Rule 26(f). Fed.R.Civ.P. 26(d)(1). However, the court has discretion to alter the timing and sequence of discovery. Id. While the Federal Rules of Civil Procedure do not set forth the standard to be applied in assessing a motion for expedited discovery, courts typically apply either a reasonableness or good cause test taking into account the totality of the circumstances, or a modified preliminary injunction test. Gaming v. W.G. Yates & Sons Constr. Co., No. 1:16CV30, 2016 WL 3450829, at *3 (W.D. N.C. 16 June 2016); Lewis v. Alamance Cty. Dep't of Soc. Servs., No. 1:15CV298, 2015 WL 2124211, at *1 (M.D. N.C. 6 May 2015).

         This court agrees with the courts in this circuit that have applied the reasonableness or good cause standard to requests for expedited discovery. See Gaming, 2016 WL 3450829, at *3; Chryso, Inc. v. Innovative Concrete Sols, of the Carolinas, LLC, No. 5:15-CV-115-BR, 2015 WL 12600175, at *3 (E.D. N.C. 30 June 2015); Dimension Data N. Am., Inc. v. NetStar-1, 226 F.R.D. 528, 531 (E.D. N.C. 2005). Factors that courts consider under this test include the procedural posture of the case, whether the discovery requested is narrowly tailored, whether the party seeking the information would be irreparably harmed by waiting until after the parties conduct their Rule 26(f) conference, and whether the information sought would be unavailable or subject to destruction in the absence of expedited production. Chryso, 2015 WL 12600175, at *3. In any event, under either test, a party must show "a likelihood of irreparable harm without access to early discovery." Lewis, 2015 WL 2124211, at *2.

         The court will examine separately each of the factors relating to plaintiffs request for expedited discovery. The court's discussion of the fourth factor, relating to the risk of spoliation of evidence, includes the court's analysis of plaintiff s separate request for a preservation order.

         1. Procedural Posture

         Here, plaintiff seeks to conduct discovery prior to defendants filing answers in the case. As noted, plaintiff has filed a motion for a TRO, but no hearing is currently scheduled on that motion. Other courts have permitted expedited discovery in preparation for a hearing seeking injunctive relief. See KBG Holding Corp. v. Union Bank, 56 Fed.Appx. Ill. 114 (4th Cir. 2003) ("The parties engaged in expedited discovery in preparation for the . . . hearings on the competing motions for preliminary injunction."). Because no hearing is currently scheduled, this factor weighs only slightly in favor of permitting expedited discovery. Chryso, 2015 WL 12600175, at *3 ("The lack of a pending motion hearing distinguishes this case from many other cases regarding expedited discovery. Thus, if the court were to allow [plaintiffs] expedited discovery, there is the potential that the parties might engage in discovery in preparation for a preliminary injunction hearing that never occurs. Therefore, while the procedural posture of this case generally weighs in favor of granting [plaintiffs] Motion, it does so only slightly because of the uncertainty surrounding a potential preliminary injunction hearing."); see also Dimension Data, 232 F.R.D. at 532 (noting that expedited discovery was not warranted because no TRO or preliminary injunction hearing or determination was pending).

         2. Scope of Discovery Requests

         As noted, in order to justify expedited discovery, the proposed discovery requests must be targeted or otherwise tailored to obtaining injunctive relief, and not simply be addressed to the ultimate merits of plaintiffs claims. See Nutrition & Fitness, Inc. v. Progressive EMU, Inc., 5:12-cv-192-F, 2012 WL 1478734, at *4 (E.D. N.C. 27 Apr. 2012) (finding expedited discovery appropriate but narrowing the requests from those sought by plaintiff); Dimension Data, 232 F.R.D. at 532 (denying expedited discovery ...


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