Medimpact Healthcare Systems, Inc. v. IQVIA Holdings Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MEDIMPACT HEALTHCARE Case No.: 19-cv-1865-GPC (DEB) SYSTEMS, INC., et al., 12 ORDER ON JOINT MOTION FOR Plaintiffs, 13 DETERMINATION OF DISCOVERY v. DISPUTE AND GRANTING 14 MOTIONS TO SEAL DOCUMENTS IQVIA INC., et al., 15 Defendants. [DKT. NOS. 261, 263, 264] 16 17 I. INTRODUCTION 18 Before the Court is the parties’ Joint Motion for Determination of Discovery 19 Dispute. Dkt. No. 263. The dispute concerns Plaintiff’s Request for Production of 20 documents relating to seven of Defendants’ projects: (1) India; (2) ANAM; 21 (3) Jordan/Hakeem; (4) IPC dClaim Portal; (5) QHIE-HUB; (6) Riayati; and (7) Injazat. 22 Id. Plaintiffs claim these projects “exemplify Defendants’ misappropriation of [Plaintiffs’] 23 trade secrets, fraudulent scheme to compete against [Plaintiffs] and efforts to conceal this 24 misconduct.” Id. at 5. Defendants argue none are relevant to Plaintiff’s claims. Id. at 9. 25 For the reasons set forth below, the Court GRANTS in part and DENIES in part 26 Plaintiffs’ request to compel discovery regarding these projects. 27 28 1 II. LEGAL STANDARD 2 “[B]road discretion is vested in the trial court to permit or deny discovery . . . .” 3 Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). “Parties may obtain discovery 4 regarding any non-privileged matter that is relevant to any party’s claim or defense and 5 proportional to the needs of the case.” Fed. R. Civ. P. 26(b). Even after the 2015 6 amendments to Rule 26, “discovery relevance remains a broad concept.” Fed. Nat’l Mortg. 7 Ass’n v. SFR Invs. Pool 1, LLC, No.14-cv-02046-JAD-PAL, 2016 WL 778368, at *2 n.16 8 (D. Nev. Feb. 25, 2016); see also Odyssey Wireless, Inc. v. Samsung Elecs. Co., Ltd, No. 9 15-cv-01735-H (RBB), 2016 WL 7665898, at *7 (S.D. Cal. Sept. 20, 2016) (“Relevance 10 is construed broadly to include any matter that bears on, or reasonably could lead to other 11 matters that could bear on, any issue that may be in the case.”) (citing Oppenheimer Fund, 12 Inc. v. Sanders, 437 U.S. 340, 350–51 (1978)). 13 The party seeking to compel discovery has the burden of establishing its request 14 satisfies the relevancy requirements of Rule 26(b)(1). Soto v. City of Concord, 162 F.R.D. 15 603, 610 (N.D. Cal. July 17, 1995). “[T]he party opposing discovery bears the burden of 16 showing that discovery should not be allowed, and of clarifying, explaining, and supporting 17 its objections with competent evidence.” Medicinova Inc. v. Genzyme Corp., No. 14-cv- 18 2513-L (KSC), 2017 WL 2829691, at *4 (S.D. Cal. June 29, 2017) (quoting Lofton v. 19 Verizon Wireless (VAW) LLC, 308 F.R.D. 276, 281 (N.D. Cal. 2015)). 20 III. DISCUSSION 21 This is a suit for misappropriation of trade secrets. Plaintiffs allege Defendants 22 wrongfully obtained and used data from Plaintiffs’ pharmacy benefits management 23 (“PBM”) platform. Dkt. No. 93. Plaintiffs claim an arbitration tribunal determined a third 24 party, Dimensions Healthcare LLC (“Dimensions”) (later acquired by Defendants), 25 developed two competing products using Plaintiffs’ misappropriated PBM trade secrets 26 and improperly competed against Plaintiffs with a third product. Dkt. No. 263 at 4. Based 27 on this determination, Plaintiffs claim the tribunal “enjoined any offer or sale” of the 28 1 following products: Adjudication Insurance Management System (“AIMS”); Insurance 2 Claims Manager (“ICM”); and Checks for Drugs Services (“CDS”). Id. 3 Plaintiffs request discovery into the seven projects at issue, claiming they are 4 “central to [Plaintiffs’] allegations” because each “can be traced to one or more . . . enjoined 5 products. . . .” Dkt. No. 263 at 5. Defendants respond that “these seven projects [do not] 6 involve . . . unlawful competition” (id. at 9) and attach supporting affidavits (Dkt. Nos. 7 263-1–263-3). 8 A. The ANAM, Jordan/Hakeem, and Injazat Projects Are Discoverable 9 The Court finds Plaintiffs carried their burden of establishing the ANAM, 10 Jordan/Hakeem, and Injaza projects are relevant to Plaintiffs’ claims. Plaintiffs’ 11 submission sufficiently demonstrates these projects may contain evidence bearing on the 12 issues in this case. 13 The Court is not persuaded by Defendants’ argument that the Court should not allow 14 discovery into projects where Defendant’s “did not win the business.” Dkt. No. 263 at 11. 15 Unsuccessful bids may still evidence use or attempted use of Plaintiff’s trade secrets. 16 The Court also is not persuaded by Defendants’ argument that the Court should not 17 allow discovery into “pre-[arbitration] injunction proposal[s].” Id. at 10. See Dkt. No. 258 18 (July 15, 2021 Order overruling Defendants’ objection to discovery into “issues that were 19 previously decided” in the prior arbitration). 20 The Court, therefore, orders Defendants to produce responsive documents on the 21 ANAM, Jordan/Hakeem, and Injaza projects. 22 B. The India, IPC, QHIE-HUB, India, and Riayati Projects Are Not Discoverable 23 The Court finds Plaintiffs have not established the relevance of the IPC eClaim 24 Portal, QHIE-HUB, India, and Riayati projects. Plaintiff have not sufficiently 25 demonstrated these projects involve the trade secrets at issue here, and Defendants have 26 come forward with evidence that they do not. See Kinnee v. Shack, Inc., No. 07-cv-1463- 27 AC, 2008 WL 1995458, at *4 (D. Or. May 6, 2008) (“Barring contradicting evidence, the 28 court typically relies upon a party’s representations about the information or documents it 1 ||has produced or does not possess.”). The Court, therefore, denies Plaintiffs’ request to 2 ||compel discovery into the IPC eClaim Portal, QHIE-HUB, India, and Riayati projects. 3 IV. MOTIONS TO SEAL 4 Each party filed a motion to seal documents. Dkt. Nos. 261, 264. The parties request 5 ||the Court seal the documents lodged at Dkt. Nos. 262 and 265 (Joint Motion for 6 || Determination of Discovery Dispute, certain exhibits provided in support of the Joint 7 ||Motion, Dimensions witnesses’ declarations, and accompanying exhibits to the 8 || declarations) because these documents implicate Defendants’ “confidential and sensitive 9 || business information,” and contain Defendants’ operations, strategies to obtain new clients, 10 “confidential projects, products and deal terms.” Dkt. Nos. 261 at 3; 264 at 3. The 11 || parties filed a redacted pleading that omits the information in question. Dkt. No. 263. Good 12 cause appearing, the Court GRANTS the Motions to Seal and directs the Clerk of Court to 13 || file the documents lodged at Dkt. Nos. 262 and 265 under seal. See Kamakana v. City & 14 || Cnty. of Honolulu, 447 F.3d 1172, 1180 (9th Cir. 2006) (“[A] particularized showing under 15 ||the ‘good cause’ standard of Rule 26(c) will suffice to warrant preserving the secrecy of 16 ||sealed discovery material attached to nondispositive motions.”) (citations, quotations, and 17 || edits omitted). 18 V. CONCLUSION 19 Based on the foregoing, Plaintiffs’ request to compel discovery on seven projects 1s 20 ||GRANTED in part and DENIED in part. Defendants must produce responsive documents 21 the Injazat, Jordan/Hakeem, and ANAM projects on or before August 23, 2021. The 22 |! documents lodged at Dkt. Nos. 262 and 265 SHALL BE FILED UNDER SEAL. 23 IT IS SO ORDERED. 24 Dated: August 9, 2021 — 25 " 26 Honorable Daniel E. Butcher United States Magistrate Judge 27 28