United States District Court, E.D. Virginia, Richmond Division
E. Payne Senior United States District Judge.
matter is before the Court on COUNTERCLAIM DEFENDANT STEVES
& SON'S INC., AND SAM STEVES AND EDWARD STEVES'
MOTION FOR SANCTIONS UNDER RULE 37, INCLUDING A CONTINUANCE
(ECF No. 1306). For the reasons set forth below, the motion
was denied. See ECF No. 1469.
Court has described the factual background underlying this
dispute at length in its recent opinion denying summary
judgment on JELD-WEN, Inc.'s ("JELD-WEN")
federal and state counterclaims for trade secret
misappropriation. See Summary Judgment Op. (ECF No.
1424) at 2-7. However, procedural details relevant to this
motion are provided here for context.
April 19, 2017, the Court ordered JELD-WEN to "identify
the specific trade secrets that it proposes will be the
subject of its counter claim and identify the witnesses it
will use to support those claims'" ("the April
19 Order"). ECF No. 143 at 1-2. On April 26, JELD-WEN
responded by filing: (1) a statement of misappropriated trade
secrets, ECF No. 185 (Under Seal); and (2) a list of eleven
witnesses who might "testify about facts that relate to
JELD-WEN's trade secrets counterclaims'': Sam
Steves, Edward Steves, John Ambruz, Gregory Wysock, John
Pierce, Robert Merrill, Brooks Mallard ("Mallard"),
Kirk Hachigian, John Jarosz, Jay Borrell
("Borrell"), and James Edward Reed
("Reed"), ECF No. 182-2.
Steves and Sons, Inc. ("Steves") raised concerns
about the vagueness of the descriptions in JELD-WEN's
initial trade secrets statement, the Court noted that the
trade secrets needed to be "specifically
identified." Aug. 9, 2017 Transcript (ECF No. 350) at
131:17. JELD-WEN subsequently served Steves with an updated
trade secrets statement in response to Steves'
interrogatories. See ECF No. 357-2 (Under Seal).
Steves then moved to strike portions of the updated statement
that were imprecise, and the Court granted that motion in
part on October 6. ECF No. 424. The Court also urged JELD-WEN
to "err ... on the side of making [the statement] so
crystal clear and so precise that there can be no room for
contention that you are being vague and leaving the door
open." Oct. 3, 2017 Transcript (ECF No. 420) at 22:6-8.
Following those instructions, JELD-WEN filed an amended
statement of misappropriated trade secrets on October 9
("the Amended Statement"). ECF No. 428 (Under
Seal). The Amended Statement contained a number of rows of
trade secrets, but some rows included more than one paragraph
then relied on the Amended Statement to conduct its Rule
30(b)(6) depositions of JELD-WEN through JELD-WEN's two
corporate designees, Reed and Mallard. During those
depositions, Steves' counsel asked the witnesses whether
they understood certain rows to contain a single combination
trade secret or multiple trade secrets. Testifying about
different rows in the Amended Statement, Reed and Mallard
both responded that JELD-WEN considers each individual item
in the row to be confidential and a trade secret, and that
the cumulative information in the whole row is also
confidential and a trade secret. Reed also explained that
JELD-WEN does not keep a list of trade secrets, considers all
its information confidential, and does not separate that
information into items or groups.
November 2, JELD-WEN filed an updated statement of
misappropriated trade secrets to be asserted at trial
("the Trial Statement"). ECF No. 468 (Under Seal).
The Trial Statement was filed in accordance with an earlier
scheduling order, which set a date by which JELD-WEN had to
eliminate trade secrets that it would not assert at trial.
See ECF No. 3 74 at 2. Shortly thereafter, JELD-WEN
moved for leave to add several trade secrets to the Trial
Statement based on the declarations of two individuals,
including JELD-WEN's industry expert James Morrison
("Morrison"), about other misappropriated trade
secrets that those individuals discovered while reviewing
documents produced by Steves. The Court granted the motion on
November 27, ECF No. 581, and JELD-WEN filed an amended
statement of misappropriated trade secrets for trial
("the Amended Trial Statement") on November 29. ECF
No. 588 (Under Seal).
subsequent deposition, Morrison testified about the
information in the Amended Trial Statement, having been
retained by JELD-WEN to express his expert opinion on whether
that information was confidential, protected, and valuable to
JELD-WEN. When asked whether certain information was an
individual trade secret, Morrison said that it was a trade
secret” [s]eparately and in combination." Morrison
Dep. (ECF No. 884-5) (Under Seal) at 95:1-2. Morrison avoided
answering that line of questioning by responding that
JELD-WEN had not retained him to give an opinion on whether
particular information constituted a trade secret.
Id. at 96:4-13. Morrison then numbered the rows in the
Amended Trial Statement, showing that the document contained
28 rows of trade secrets. See Morrison Annotated
Trial Statement (ECF No. 884-6) (Under Seal).
expert discovery was completed, Steves moved for summary
judgment on January 24, 2018, ECF No. 885, and the motion
became ripe on March 5, ECF No. 1124. Shortly thereafter, on
March 15, after JELD-WEN's counsel advised that JELD-WEN
would assert only one combination trade secret at trial, the
Court ordered JELD-WEN to submit an updated trade secrets
statement that delineated each trade secret and explained the
source of the trade secret in more detail than in the Amended
Trial Statement. ECF No. 1199. In response, JELD-WEN filed
an updated statement ("the Second Amended Trial
Statement") on March 21. ECF No. 1218 (Under Seal) .
That statement removed generalized information from several
rows in the Amended Trial Statement and removed entirely the
information constituting several trade secrets.
argument on Steves' summary judgment motion, Steves again
expressed concern about the specificity of certain trade
secrets in the Second Amended Trial Statement and Steves'
inability to examine the information therein as part of its
summary judgment motion. Sharing Steves' frustration with
the vague testimony of JELD-WEN's witnesses, the Court
I've never ever seen a situation where there had been as
flagrant a situation as here where the experts and the lay
witnesses say it's both under the law without saying
which one is. It's okay to say there are six parts and
all six of them are individually and all six of them are in
combination, but there are combinations within separate trade
secrets here that are alleged, and it's nothing but the
fault of people who have not obeyed the Court orders to do
what they were told to do. . . .
[T] he lawyers could simply have told Mallard, Reed, and
Morrison you can't testify that way except as to these,
and these are the right ones, because they've dropped the
combination ones now. So they obviously didn't have a
combination claim for all of them. And that could have been
done months ago.
Mar. 26, 2018 Transcript (ECF No. 1295) at 52:2-19. The Court
restated its criticism of JELD-WEN's approach later in