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Hartsock v. Goodyear Dunlop Tires North America Ltd.
672 F. App'x 223
| 4th Cir. | 2016
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Background

  • July 2010: Sarah Hartsock killed in S.C. crash; personal representative Theodore Hartsock brings wrongful death and survival claims alleging a Goodyear tire blowout caused the crash.
  • Diversity jurisdiction in federal court; discovery dispute over Goodyear’s design/chemical-composition materials which Goodyear claims are trade secrets.
  • District court found materials were trade secrets but ordered production under a confidentiality protective order, applying federal discovery law (Rule 26).
  • Goodyear sought reconsideration on grounds South Carolina law (SCTSA and related state precedent) governs and affords greater protection; district court denied and certified interlocutory appeal under 28 U.S.C. § 1292(b).
  • Fourth Circuit found no controlling South Carolina authority definitively answering whether South Carolina recognizes an evidentiary privilege for trade secrets and certified that question to the South Carolina Supreme Court; did not resolve the substantive disclosure standard.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether South Carolina recognizes an evidentiary privilege for trade secrets, and thus whether state law or federal law governs disclosure in this diversity action Hartsock: federal law (FRCP and federal common law) governs discovery; SCTSA isn’t inconsistent with federal law so federal standard controls Goodyear: South Carolina recognizes a trade-secrets evidentiary privilege (per SCTSA and Laffitte), imposing a more stringent disclosure standard; Rule 501 requires application of state privilege law Fourth Circuit: No definitive controlling state authority found; certified the question to the South Carolina Supreme Court for resolution (did not decide the substantive issue)

Key Cases Cited

  • Federal Open Market Comm. v. Merrill, 443 U.S. 340 (U.S. 1979) (recognizes qualified federal privilege for trade secrets and confidentiality balancing)
  • MDK, Inc. v. Mike’s Train House, Inc., 27 F.3d 116 (4th Cir. 1994) (trade secrets discoverable with protective orders under federal law)
  • Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (U.S. 1996) (apply state substantive law and federal procedural law in diversity cases)
  • Seidman v. Fishburne-Hudgins Educ. Found., Inc., 724 F.2d 413 (4th Cir. 1984) (state law governs privilege when state law supplies rule of decision)
  • Laffitte v. Bridgestone Corp., 674 S.E.2d 154 (S.C. 2009) (South Carolina’s three-part balancing test for discovery protective orders under the SCTSA)
  • Ex parte Capital U-Drive-It, Inc., 630 S.E.2d 464 (S.C. 2006) (recognizes restriction of public access for matters including legitimate trade secrets)
  • S.C. State Hwy. Dept. v. Booker, 195 S.E.2d 615 (S.C. 1973) (defines privileged matter in South Carolina)
  • S.C. St. Bd. of Med. Examiners v. Hedgepath, 480 S.E.2d 724 (S.C. 1997) (distinguishes confidentiality from legal privilege)
  • Ardrey v. UPS, 798 F.2d 679 (4th Cir. 1986) (district courts have wide latitude supervising discovery; appellate review is deferential)
Read the full case

Case Details

Case Name: Hartsock v. Goodyear Dunlop Tires North America Ltd.
Court Name: Court of Appeals for the Fourth Circuit
Date Published: Nov 29, 2016
Citation: 672 F. App'x 223
Docket Number: 16-1172
Court Abbreviation: 4th Cir.