Gateway Logistics, Inc. v. Smay
2013 CO 25
Colo.2013Background
- Original proceeding under C.AR. 21 to review a trial court’s order granting a motion to compel discovery in a breach of fiduciary duty and misappropriation of trade secrets case.
- Plaintiffs sought to inspect Smay’s and his wife’s personal and business computers and electronic storage devices and to obtain three years of telephone records; defendants objected on privacy grounds.
- Trial court granted the motion to compel, ordering inspection of devices and production of telephone records, and awarded plaintiffs’ attorneys’ fees.
- Court vacated the order as to the electronic storage devices and telephone records for failure to apply the In re District Court balancing test and remanded for findings under that test.
- Facts: Smay resigned in July 2010 and started competing firms; plaintiffs allege breach of loyalty/fiduciary duty and misappropriation of trade secrets; imaging suggestion and protective order context discussed.
- Court exercised original jurisdiction to review discovery order and stated standard of review as abuse of discretion, with privacy balancing central to the decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court properly balanced privacy interests under In re District Court. | Plaintiffs contend compelling need; imaging plan could limit privacy. | Defendants emphasize individuals’ privacy and nonparty wife’s lack of party status. | Yes; abuse; remand to apply balancing test. |
| What weight nonparty status of Smay’s wife carries in balancing. | Nonparty status should be weighed against disclosure. | Nonparty status weighs against compelled disclosure. | Weighs against disclosure; remand for balancing with nonparty factors. |
| Whether imaging and least-intrusive means are appropriate to obtain information. | Imaging with blocking of private data is acceptable. | Need for privacy protections and alternatives if imaging is used. | Remand to determine whether least intrusive means can be used. |
Key Cases Cited
- In re District Court, 256 P.3d 687 (Colo.2011) (balancing test for privacy in discovery)
- Cantrell v. Cameron, 195 P.3d 659 (Colo.2008) (privacy interest in a party’s computer; balancing framework)
- Stone v. State Farm Mut. Auto Ins. Co., 185 P.3d 150 (Colo.2008) (privacy interest in tax/financial records; balancing framework)
- Corbetta v. Albertson’s, Inc., 975 P.2d 718 (Colo.1999) (privacy interests in discovery; broad discovery vs. privacy rights)
- Martinelli v. Dist. Court, 199 Colo. 163 (Colo.1980) (privacy/confidentiality balancing; police/public records context)