PCS4LESS, LLC v. Stockton
291 Mich. App. 672
| Mich. Ct. App. | 2011Background
- Appellees allege defendants misappropriated exclusive software Covenant and CNS used to unlock Motorola phones and transferred CNS-related data to Go Mobile, Inc.
- Appellees claim the CNS program and related data constitute confidential trade secrets.
- Trial court granted a TRO and ordered return of appellees' property and preservation of electronic data.
- Go Mobile, Lobb, and Mason submitted affidavits claiming Fifth Amendment self-incrimination; appellees sought to compel production or proper affidavits.
- Trial court found the affidavits insufficient and ordered production of CNS or valid affidavits; court noted lack of direct contact with federal authorities and applicable statutes.
- Court of Appeals affirmed in part and reversed in part, applying a Paramount Pictures Corp. test to determine whether the CNS program is a record of the organization or individuals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Fifth Amendment bar compelled CNS production or affidavits? | Appellees contend no bar; production compelled. | Appellants argue Fifth Amendment privilege protects them and prevents production. | Partially barred for Mason/Lobb; Go Mobile production allowed |
| Is the CNS program a record of the organization or an individual's property for privilege purposes? | CNS is organization-owned record; production allowed. | CNS personal to individuals; privilege may apply. | CNS is Go Mobile's organizational record; privilege not to prevent production |
| Did the trial court abuse its discretion in discovery orders regarding the CNS program? | Orders properly compelled production or admissions. | Orders improperly infringed on Fifth Amendment rights. | Affirmed in part for Go Mobile; reversed for Mason and Lobb; remanded |
Key Cases Cited
- Doe v. United States, 465 U.S. 605 (U.S. 1984) (production may reveal testimonial aspects; contents not privileged)
- United States v. White, 322 U.S. 694 (U.S. 1944) (corporate privilege cannot be asserted on behalf of an organization)
- Paramount Pictures Corp. v. Miskinis, 418 Mich. 708 (Mich. 1984) (three-part test for organizational privilege: ownership, representative capacity, and institutional identity)
- Bellis v. United States, 417 U.S. 85 (U.S. 1974) (notes limits of organizational privilege; exceptions for small entities)
- United States v. Doe, 465 U.S. 605 (U.S. 1984) (Doe cited for compelled production aspects of documents)
- Mercy Mt. Clemens Bank v Auto Club Ins. Ass’n, 219 Mich. App. 46 (Mich. App. 1996) (standard for reviewing discovery orders; abuse of discretion framework)