LIFESCIENCE TECHNOLOGIES, LLC v. MERCY HEALTH, et al,
Case No. 4:21-cv-01279-SEP
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION
September 30, 2024
Case: 4:21-cv-01279-SEP Doc. #: 461 Filed: 09/30/24 PageID #: 18500
Before the Court are Plaintiff LST‘s Motion to Compel Production of ESI from Two Additional Custodians, Doc. [216], Defendant Mercy‘s Motion to Strike and Exclude LST‘s Belatedly-Identified Proposed Witnesses, Doc. [251], and Mercy‘s Motion to Deem Plaintiff LST‘s Responses to Requests for Admission as Admitted, Doc. [290]. For the reasons set forth below, Plaintiff‘s motion is granted and Defendant‘s motions are denied.
BACKGROUND
This trade secret misappropriation case arises out of a dispute between LST and Defendants Mercy and Myia. LST is a software development company that develops and delivers virtual patient care solutions. Doc. [1] ¶ 19. One of LST‘s virtual care platforms is m.Care, which connects hospital-based teams with home-based patients. Id. ¶¶ 19, 22. In 2015, Mercy asked LST to further develop its m.Care platform for use in Mercy‘s patient population. Id. ¶ 30. Sometime in 2018, while Mercy was still using LST‘s m.Care platform, Mercy announced that it was bringing Defendant Myia aboard to co-develop a virtual patient care platform for Mercy‘s use. Id. ¶ 57. When Myia began working with Mercy, it did not have its own virtual care platform. Id. ¶ 59. Plaintiff alleges that Mercy improperly allowed Myia employees to access the m.Care platform in order to examine, reverse engineer, and use LST‘s trade secrets and intellectual property to develop Myia‘s software platform. Id. ¶¶ 60-77, 81. When Myia‘s software was functionally capable of replacing the m.Care software, Mercy stopped using m.Care and began using Myia‘s virtual care platform instead. Id. ¶ 86.
Discovery in this matter has given rise to numerous disputes, which the Court has heard at informal discovery conferences. These motions follow. Additional information about each dispute will be set forth as necessary below.
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party‘s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
A party is not necessarily entitled to all discovery that is relevant, and courts may limit discovery “if the burden or expense of the proposed discovery outweighs its likely benefit,” if it “is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive,” and when “the party seeking discovery has had ample opportunity to obtain the information by discovery in the action.”
Under
“If a party fails to provide information or identify a witness as required by
The district court considers the following four factors in determining whether a
A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to: facts, the application of law to fact, or opinions about either; and the genuineness of any described documents . A matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney.
“Requests for admissions should be simple and direct, as parties are not required to admit or deny requests that consist of vague or ambiguous statements.” Margulis v. Euro-Pro Operating, LLC, 2013 WL 5442702, at *3 (E.D. Mo. Sept. 30, 2013). While requests for admission may properly pertain to “the application of law to fact,” pure legal conclusions, or the truth of legal conclusions, are outside the scope of requests for admission. See Aventure Communications Technology, L.L. C. v. MCI Communications Services, Inc., 2008 WL 4280371, at *1 (N.D. Ia. 2008). Requests for admission “are intended to establish the admission of facts
DISCUSSION
I. LST‘s motion to compel production of ESI is granted.
LST seeks an order compelling Myia to produce, at its expense, ESI for two additional custodians, Bill Abeln and Tara Parsons. Doc. [217] at 1. Abeln was a Customer Success Manager and Parsons was a Technical Support Specialist for Myia, and LST asserts that both of them were involved in Myia‘s development of its virtual patient care system. Id. Parsons is also a former Mercy employee who used LST‘s patient care platform during her tenure there. Id. Myia did not identify these individuals in response to an LST interrogatory asking for the names of individuals who played a role in development of Myia‘s virtual care product, so LST did not initially request their inclusion as ESI custodians. Id. at 1-2. Of the seven people LST did select as custodians, Myia deleted the email records of four of them. Id. at 2. Because of the inability to access the emails for four named custodians, LST asserts that it is unlikely that all relevant ESI for Abeln and Parsons has been captured in the ESI already produced by Myia through other custodians. Id.
The parties’ dispute concerning production of ESI for these custodians was the subject of a discovery conference held on November 20, 2023. At that conference, the undersigned informed the parties that, based on the arguments presented, if LST were to file a motion to compel ESI production for these two individuals, it would likely be granted, unless Myia provided more compelling arguments against such production than had thus far been made. Doc. [215] at 69-70. After review of the parties’ briefs, the Court‘s initial conclusion is unchanged.
It appears to the Court that (a) Abeln and Parsons were involved in the development of Myia‘s platform, (b) information gleaned from adding them as custodians would be neither cumulative nor duplicative and (c) such discovery is proportional to the needs of the case. LST points to multiple communications produced through other Myia custodians that show Abeln‘s and Parsons‘s involvement. Just a few examples: Abeln, in messages exchanged with the Myia team, noted Mercy‘s “request was ‘make it look like LST for now‘“; in another message he wrote that Mercy “asked for that a number of times. One of my least favorite ‘well in LST we could . . . ‘“; in another message he noted that “our goal is to have parity/exceed LST“; and on a Myia message chain titled “design collaboration,” Abeln noted that he shared a document with the Myia team “that encompassed some suggestions/ideas from the [Mercy] team via [his] shadowing” that would enhance the Myia platform; and when an individual on Myia‘s team indicated they had never seen “the LST table before,” Abeln responded that he has “a bunch of screen shots and videos” of the platform that he could share. Doc. [217] at 4-5. Additionally, during Mercy‘s 30(b)(6) deposition, there was testimony that Abeln “worked as a liaison between the clinical team [at Mercy] at the Myia development team.” Id. at 5. As for Parsons, before she was hired by Myia, she worked at Mercy, where she participated in meetings with Myia representatives “to discuss the LST screens and what is important and what is not.” Id. at 6. After joining Myia, she accessed LST‘s platform, taking video recordings that she shared with others on the Myia development team. Id.
Though the full extent of Abeln‘s and Parsons‘s involvement with the Myia software development team is unclear, LST has provided sufficient information to belie Myia‘s claim that they “were in no way involved in the development of Myia‘s software.” Doc. [241] at 1 (emphasis added). And, as Myia acknowledged at the discovery conference, it is undisputed that Abeln and Parsons accessed the LST platform and took screen shots and exchanged messages
The Court will not shift the costs of this discovery to LST. “Typically, a party must pay its own costs to respond to discovery.” No Spill, LLC v. Scepter Canada, Inc., 2021 WL 4860556, at *9 (D. Kan. Oct. 19, 2021). “Costs for producing documents are generally shifted only when an undue burden or expense is imposed on the responding party, taking into account the needs of the case, the amount in controversy, the parties; resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.” McClurg v. Mallinckrodt, Inc., 2016 WL 7178745, at *3 (E.D. Mo. Dec. 9, 2016) (internal quotation omitted). The party seeking cost-shifting has the burden to show there is good cause to shift expenses by making “a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.” Lawson v. Spirit AeroSystems, Inc., 2020 WL 3288058, at *10 (D. Kan. June 18, 2020). Here, Myia has made only conclusory assertions that it will suffer undue burden in producing what it characterizes as unimportant additional ESI; it provides no sufficiently “particular and specific” reasons supporting those assertions. Thus, Myia has failed to rebut the presumption imposed by the Federal Rules that each party should bear its own cost of discovery. Myia is fortunate to not be ordered to pay LST‘s reasonable expenses in bringing this motion, considering that the Court made its position on this dispute clear at the November 2023 conference, yet Myia nonetheless forced LST to move to compel and did not provide any novel or more convincing argument in opposition to the motion.
II. Mercy‘s motion to strike and exclude LST‘s witnesses is denied.
On November 13, 2023, LST served its Amended Initial Disclosures, in which it disclosed 15 witnesses that were not included in its Initial Disclosures. Close of discovery in this matter was on December 8, 2023. See Doc. [213]. On December 20, 2023, Mercy advised LST
Some background regarding the witnesses is necessary to understand the question before the Court. 1904 Labs is a technology consulting firm hired by Mercy in February 2019 to develop custom software. Id. at 2. LST asserts that at that time it was under the impression that 1904 Labs was working on a dashboard for Mercy that would display patient data captured on multiple systems, including m.Care, and that the 1904 Labs product was complementary to m.Care, rather than contributing to the development of a replacement for m.Care. Id. LST explains that it was not until May 2023 during the deposition of former Mercy employee, Mark Saxon, that it became aware that the software 1904 Labs was engaged to build was related to the replacement of m.Care. Id. at 3. LST states that it then attempted to obtain more information about 1904 Lab‘s involvement during the depositions of multiple Mercy witnesses in the summer of 2023 but found they had no information to offer on the subject. Id. LST then served a subpoena on 1904 Labs in September of 2023, and between October 19 and October 24, 2023, 1904 Labs produced a total of 11,035 responsive documents, which LST then reviewed. Id. at 4. After reviewing the information, LST concluded that 1904 Labs had likely been improperly granted access to m.Care while designing its product, and in light of this, LST selected certain
As for Piper Sandler, on August 11, 2023, Mercy‘s CFO testified that Mercy used a third party to perform a valuation of its recently developed vEngagement software in connection with Mercy‘s desire to commercialize the product. See [276-6]. He stated that Mercy would not have deleted the valuation, and he would look for it on Mercy‘s system. Id. LST later requested that Mercy produce such valuation, and in September 2023, Mercy informed LST that it was not able to locate it. Doc. [276-1] at 5. Because Mercy could not provide the requested information, LST subpoenaed Mercy‘s two financial services firms, Piper Sandler and Grant Thornton. Id. On November 9, 2023, counsel for Piper Sandler confirmed that it had responsive documents and would collect and produce the same. Id. Because of this representation, LST added Piper Sandler to its amended disclosures, which were served on Mercy only 4 days after LST learned that Piper Sandler had relevant information. Id.
The discovery deadline in this case was December 8, 2023. See Doc. [213]. Trial is scheduled to begin on April 7, 2025. LST identified the nine disputed witnesses in November 2023, mere weeks (or in the case of Piper Sandler, days) after becoming aware of their import to its claims. This was within the discovery period and almost a year and a half before trial.
Mercy could have taken discovery related to 1904 Labs or Piper Sandler prior to the close of discovery, but it appears not to have had any real interest in doing so, which is perhaps
III. Mercy‘s motion to deem LST‘s responses to RFAs as admitted is denied.
On September 2, 2023, Mercy served on LST 228 requests for admission (RFAs). Doc. [307] at 2. Due to the large number of RFAs, LST requested an extension of the 30-day period for responding afforded under
The Eastern District of Missouri applies a two-part test to determine if a plaintiff‘s motion to withdraw an admission and extend the time to respond should be granted. Clines v. Special Admin. Bd. Transitional Sch. Dist. of City of Saint Louis, 2019 WL 398352, at *1-2 (E.D. Mo. Jan. 31, 2019); Pitts, 2012 WL 3765086, at *3. The first prong “directs the court to analyze whether permitting withdrawal of the admissions would promote the moving party‘s ability to have the case heard on the merits.” Clines, 2019 WL 398352, at *1 (“[W]hen a material fact is contested, considering the fact to be admitted precludes, rather than promotes, presentation of the case on the merits.“). Likewise, “[i]f the admissions would prevent Plaintiffs from having their claims considered, allowing withdrawal promotes the presentation on the merits.” Pitts, 2012 WL 3765086, at *3. The second prong “requires a showing of prejudice to the nonmoving party, and that party bears the burden” of proving it would be prejudiced if the Court allowed a late admission. Clines, 2019 WL 398352, at *2. “The prejudice contemplated by
The first prong is satisfied here. Defendant‘s disputed RFAs “seek less to establish factual predicates for trial and more to dismantle Plaintiff‘s claims.” Pitts, 2012 WL 3765086, at *3. The Court agrees with Plaintiff that the RFAs at issue inappropriately go to the heart of the factual and legal disputes between the parties, including: (1) whether the SaaS agreement between Mercy and LST permitted third-parties to use LST‘s platform (RFA Nos. 3, 54, 129, 153); how the SaaS between Mercy and LST assigned ownership and allowed use of various items (RFAs Nos. 60, 72, 87, 98, 140, 144, 173); and (3) and how the PMSA between Mercy and
The second prong is also satisfied, as Mercy has not met its burden to show prejudice. In evaluating the second prong, a Court asks “whether Defendants could reasonably have believed that Plaintiffs intended to admit facts which were so vital that they amounted to a complete waiver of Defendants’ liability.” Pitts, 2012 WL 3765086, at *3. The RFAs at issue here request admission of items that no reasonable party could believe another party would admit, including requests for legal admissions and admissions that go to the heart of disputed facts. For example, Mercy asked LST to admit that: “LST breached the terms of the PMSA when it engaged Mark Saxon as a consultant, subcontractor, and/or advisor” (RFA No. 105); “LST breached the terms of the PMSA when it engaged Dr. Tom Hale as a consultant, subcontractor, and/or advisor” (RFA No. 202); “LST breached the terms of the PMSA when it engaged Vance Moore as a consultant, subcontractor, and/or advisor” (RFA No. 205); and “LST is not aware of any of its alleged trade secrets having been used by Myia” (RFA No. 134). Although Mercy claims “material prejudice” and argues that the lack of supplemental responses “materially impacted expert witness depositions,” Doc. [291] at 3, Mercy does not explain how any of the 52 RFAs bear on expert opinions or how such supplemental responses would have been used during expert depositions. See Bryant v. Laiko Int‘l Co., 2006 WL 2788520, at *5 (E.D. Mo. Sept. 26, 2006) (granting motion to withdraw admission because “Defendant provides little support for his contention” of prejudice and thus “has not met its burden of proving prejudice“). Because both prongs of the test to allow late responses are satisfied, LST is allowed to supplement its responses. And as the supplement was served on Mercy after it filed the instant motion, the supplementation renders Mercy‘s motion moot.
Accordingly,
IT IS FURTHER ORDERED that Defendant Mercy‘s Motion to Strike and Exclude LST‘s Belatedly-Identified Proposed Witnesses, Doc. [251], is DENIED.
IT IS FINALLY ORDERED that Defendant Mercy‘s Motion to Deem Plaintiff LST‘s Responses to Requests for Admission as Admitted, Doc. [290], is DENIED as moot.
Dated this 30th day of September, 2024.
SARAH E. PITLYK
UNITED STATES DISTRICT JUDGE