Harris v. Belvoir Energy, Inc.
2017 Ohio 2851
| Ohio Ct. App. | 2017Background
- Gary Harris (lessor) leased a pipeline to Lenox-Morgan Pipeline, L.L.C. under a 2004 Gas Pipeline Lease requiring the lessee to pay the greater of $850/month or $0.42 per MCF; lease expired August 31, 2015.
- Harris sued Belvoir Energy, Inc., alleging Belvoir was successor/assignee and breached the lease by paying the $850 minimum rather than the $0.42/MCF rate, asserting breach of contract, unjust enrichment, and seeking accounting.
- Harris requested production of cash receipts ledgers (2004–2015) reflecting revenues related to the pipeline and transported natural gas.
- The trial court ordered Belvoir to submit unredacted ledgers for in camera review and then ordered Belvoir to produce the unredacted ledgers to Harris.
- Belvoir asserted trade-secret protection for customer identities, customer prices, amounts paid, and other non‑pipeline information; Harris sought the documents as discovery for his claims.
- The Court of Appeals reversed, holding the trial court erred by failing to create an on‑record evidentiary record (no in‑court hearing) to determine trade‑secret status under R.C. 1333.61 and the governing Ohio law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the cash receipts ledgers must be produced unredacted | Harris argued the ledgers are discoverable and necessary to prove amounts transported and amounts owed under the lease | Belvoir argued ledgers (or portions) are trade secrets: customer lists, prices charged, payments, and non‑pipeline revenues; should be redacted | Court held: reversal — trial court erred by failing to hold an on‑record evidentiary hearing to evaluate trade‑secret claims; remand for proper record and findings |
| Who bears burden to establish trade‑secret status | Harris implicitly argued discoverability absent proof of privilege | Belvoir asserted it bore burden to show trade‑secret status and protective steps taken | Court reiterated: party asserting trade secret bears burden and must present factual evidence; conclusory claims insufficient |
| Standard of review for trade‑secret determination | N/A | N/A | Court applied de novo review for legal question whether information qualifies as trade secret under R.C. 1333.61 and required factual record to apply six‑factor test |
| Remedy when trade‑secret assertion made off‑record | Harris sought immediate production based on trial court rulings | Belvoir sought reversal or protection given lack of on‑record findings | Court reversed and remanded for on‑record evidentiary proceedings to assess trade‑secret factors; noted prior production may be difficult to undo |
Key Cases Cited
- State ex rel. Plain Dealer v. Ohio Dep’t of Ins., 80 Ohio St.3d 513, 687 N.E.2d 661 (Ohio 1997) (announces six‑factor test for trade‑secret determination)
- Pyromatics, Inc. v. Petruziello, 7 Ohio App.3d 131, 454 N.E.2d 588 (Ohio Ct. App. 1983) (discusses trade‑secret factors used by Ohio courts)
- Med. Mut. of Ohio v. Schlotterer, 122 Ohio St.3d 181, 909 N.E.2d 1237 (Ohio 2009) (legal questions about privilege and discovery reviewed de novo)
- State ex rel. Besser v. Ohio State Univ., 89 Ohio St.3d 396, 732 N.E.2d 373 (Ohio 2000) (conclusory assertions insufficient to establish privilege or trade‑secret status)