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Statewide Aquastore, Inc. v. Pelseal Technologies

February 17, 2010

STATEWIDE AQUASTORE, INC., PLAINTIFF,
v.
PELSEAL TECHNOLOGIES, LLC, DEFENDANT.



The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Currently before the Court is Defendant's appeal from Magistrate Judge Lowe's September 30, 2008 Order, in which he denied Defendant's request for a protective order precluding discovery of certain "trade secrets," and ordered "that, pursuant to a confidentiality order/stipulation, Plaintiff may have discovery, by depositions and the production of documents, of the chemical design and manufacturing process of the sealer product at issue." See Dkt. No. 32 at 3.*fn1

II. BACKGROUND

Defendant is in the business of manufacturing high performance liquid fluoroelastomer products. See Affirmation of Heath A. Bender dated October 2, 2008 ("Bender Aff."), at ¶ 4. "These are state-of-the-art coatings, adhesives, sealants, and caulks that exhibit extraordinary performance characteristics in harsh environments." See id. Plaintiff is a corporation in the business of making glass-fused-to-steel storage tanks. See id. at ¶ 5.

Plaintiff purchased several hundred tubes of fluoroelastomer sealant ("sealant") from Defendant for use in the construction of two wastewater tanks. See id. at ¶ 6; Complaint at ¶ 4. Plaintiff alleges that it used the sealant in order "to make the tanks watertight;" but, "[w]hen the tanks were filled and tested with potable water, they leaked." See Affidavit of Patience E. Schermer sworn to October 7, 2008 ("Schermer Aff."), at ¶ 3. Plaintiff alleges that the sealant's failure required it to disassemble the tanks and rebuild them with a different sealant. See id.

During discovery, Plaintiff sought information regarding the chemical makeup and manufacturing processes Defendant employed in creating its sealant. Defendant opposed producing any documents or giving any testimony that would disclose this proprietary information. See Dkt. No. 31 at 2-3. Defendant took the position that Plaintiff's inquiries about the chemical makeup, manufacturing process, and other proprietary information regarding Defendant's products, were irrelevant, improper, and were, therefore, precluded by the applicable case law and statutory authority. See id. On September 15, 2008, Magistrate Judge Lowe held a telephone conference to resolve this dispute and ordered the parties to file letter briefs further addressing their contentions.

In its letter brief, Plaintiff asked Magistrate Judge Lowe to allow it to question Defendant's representatives and to order the production of all documents relating to "potential product defect issues, the chemical design of [Defendant's] products, the manufacture of [Defendant's] products and the uses of [Defendant's] products." See Dkt. No. 30 at 3. Further, Plaintiff requested that Magistrate Judge Lowe "issue a confidentiality order to protect any proprietary information disclosed." See id. For its part, Defendant requested that Magistrate Judge Lowe issue a protective order under Rule 26(c) because the information that Plaintiff sought constituted trade secrets, and Plaintiff had failed to show that this information was indispensable to its prosecution of the case. See Dkt. No. 31 at 3.

On September 30, 2008, Magistrate Judge Lowe issued the Order from which Defendant now appeals. See Dkt. No. 32 at 3.

III. DISCUSSION

A. Standard of review

Pre-trial discovery issues are generally considered non-dispositive matters. See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990) (citations omitted). When considering an appeal from a magistrate judge's ruling on a non-dispositive matter, a district court will modify or set aside any portion of the magistrate judge's ruling that it finds to be "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a).

A finding is clearly erroneous if "the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948); United States v. Isiofia, 370 F.3d 226, 232 (2d Cir. 2004) (quotation omitted). "An order is contrary to law 'when it fails to apply or misapplies relevant statutes, case law, or rules of procedure.'" Tompkins v. R.J. Reynolds Tobacco Co., 92 F. Supp. 2d 70, 74 (N.D.N.Y. 2000) (quotation omitted). "Considering that magistrate judges are given ...


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