Opinion
99 Civ. 9437 (CSH) (GWG)
April 20, 2001
INGRAM, YUZEK, GAINEN, CARROLL BERTOLOTTI, LLP, New York, New York, By: David G. Ebert, for plaintiff.
MORGAN, LEWIS BOCKIUS, LLP, New York, New York, By: Richard A. Mescon and Joseph P. Leon, for defendant.
OPINION AND ORDER
In this case, plaintiff The Topps Company, Inc. ("Topps") alleges that the defendants Productos Stani Sociedad Anomina Industrial y Commercial and Cadbury Stani S.A.I.C. (collectively, "Stani") breached a licensing agreement and misappropriated trade secrets regarding chewing gum products. One of the issues in the case is whether and to what extent Stani continued to use Topps' recipes, formulas and ingredients specifications after the expiration of the parties' license agreement. Two motions are before the court, both brought by Topps. In the first motion, Topps seeks an order resolving an objection that was raised by Stani to Topps' retention of an expert witness. In the second motion, Topps seeks an order compelling depositions of defendants' corporate officers to take place in New York rather than Argentina. Each motion is treated separately.
Retention of Expert Witness
The motion regarding the expert witness has arisen because under a confidentiality agreement entered into by the parties Topps was required to furnish to Stani an "Undertaking Concerning Confidential and Protected Material" for any independent experts or consultants retained by the parties for the litigation. Topps furnished such an undertaking from a Robert Boutin, along with his curriculum vitae. Stani thereupon objected to Topps' designation of Mr. Boutin. Topps brought the instant motion seeking an order "resolving" this objection.
Although Topps is before the Court as movant, the motion in fact boils down to an application by Stani to have the Court disqualify Mr. Boutin from serving as an expert for Topps. The law governing such motions normally employs a two-part test: (1) whether it was objectively reasonable to have believed a confidential relationship existed with the expert and (2) whether confidential information was actually disclosed to the expert. See, e.g., In re Ambassador Group, 879 F. Supp. 237, 242 (E.D.N.Y. 1994); Mayer v. Dell, 139 F.R.D. 1, 3 (D.D.C. 1991); Palmer v. Ozbek, 144 F.R.D. 66, 67 (D. Md. 1992). Although Topps has brought the instant motion, the burden of proving the existence of a disqualifying condition rests on Stani inasmuch as their response seeks to disqualify an expert witness. See, e.g., Cordy v. Sherwin-Williams, 156 F.R.D. 575, 580 (D.N.J. 1994); English Feedlot, Inc. v. Norden Laboratories, 833 F. Supp. 1498, 1502 (D. Colo. 1993) (citing Mayer v. Dell, 139 F.R.D. at 3).
Some facts are undisputed: Stani was Topps' licensee for many years, from at least the late 1950's until 1996. Topps got Stani started in the gum manufacturing business and, as part of this process, shared confidential information with Stani. Topps originally employed Mr. Boutin as a consultant and referred Mr. Boutin to Stani in 1993 when Stani sought advice in changing its process. Mr. Boutin consulted with Stani for some period of time beginning in 1993.
What is in dispute is whether this consultation involved Stani's sharing of confidential material with Mr. Boutin. To support its contention that such confidential information passed between Stani and Mr. Boutin, Stani provides a single affidavit from a Stani employee that states without elaboration that "Mr. Boutin received significant disclosures of confidential information regarding the process and raw materials used by Stani in the manufacture of gum base, including Stani's sources of supply, local manufacturing conditions, ingredient specifications, recipes, machinery, factory layout, and production methods." Affidavit of Carlos A. Cubau, Director of Operations for Stani, dated March 2, 2001, ¶ 4. Although this document was filed under seal? not a single example is given of (1) a specific piece of information that was transmitted to Boutin, (2) by whom such information was given or (3) on what date it was given.
Mr Cubau does append documents showing that Mr. Boutin requested information about specifications for gum base and other production data. These documents are irrelevant, however, because they do not show that Mr. Boutin received any information. Moreover, Mr. Boutin states in a reply affidavit that he has no recollection of receiving such information and has found no documents containing such information in his files.Reply Affidavit of Robert Boutin, dated March 12, 2001, ¶ 3.
For his part, Mr Boutin has sworn that he received no such confidential information from Stani. He states that, in connection with his projects at Stani, "I shared with Stani my formulas and my technical knowledge regarding these gum base forms (which were then being used by others in the industry)." Affidavit of Robert F. Boutin, dated February 24, 2001, ¶ 4 (emphasis in original). He also stated that "Stani was extremely secretive and provided me with no confidential or proprietary information or formulations relating to its processes or products." Id. ¶ 5.
At oral argument, the Court pointed out the deficiency in Stani's proof that they passed confidential information on to Mr. Boutin. Nonetheless, Stani did not seek an evidentiary hearing on this issue, stating instead that they would rely on their written submissions.
Stani's central argument appears to be that it would be improper for any consultant who worked with Stani on the gum base technologies to serve as an expert in litigation for an adversary. They point to the "inevitable disclosure" doctrine, under which it is assumed that an individual who has received confidential information cannot be expected to forget such information when serving as an expert in litigation. See generally Pepsico, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995). As Stani's counsel put it at oral argument, the "atmospherics" of the issue counsel against permitting Mr. Boutin to serve as Topps' expert.
Understandably, courts have been concerned that allowing a party to retain an individual privy to an adversary's confidential information will result in an "appearance of impropriety" sanctioned by a court.See, e.g., Stanford v. Kuwait Airways Corp., 1989 WL 297860 (S.D.N Y 1989). But, in addition to the fact that there has been no showing that confidential information actually passed to Mr. Boutin, many of the factors that usually arise in the case law are completely absent here. For example, this is not a dispute between two competitors. Rather, Stani was Topps' licensee for many years. There are numerous documents in the record showing that Stani repeatedly shared information with Topps relating to Stani's manufacturing processes and formulas, including those for gum base. Nor was Mr. Boutin ever an employee of Stani. Indeed, Topps had a relationship with Mr. Boutin that pre-dated Stani's own relationship. Finally, the information at issue relates to processes that originally were given by Topps to Stani. Significantly, it was to provide assistance with these very processes that Topps had originally referred Mr. Boutin to Stani. These facts suggest that there will be no appearance of impropriety resulting from Topps' retention of Mr. Boutin as an expert.
Another factor strongly weighing against Stani is the apparent dearth of experts in gumbase technology. Mr. Boutin submitted an affidavit on this subject, which is not contradicted. He states that
[t]here are very few people in the world who are knowledgeable in the area of chewing gum. There are even fewer who are knowledgeable in the area of gum base. . . . I teach in this field, and know of no text books on either chewing gum or gum base. . . . Stani is a major "player" in the chewing gum industry and I would expect that it would be extremely difficult for Topps (or anyone else) to find a competent consultant who has not performed services for Stani or one of its affiliated entities.Affidavit of Robert F. Boutin, dated February 24, 2001, at ¶¶ 7-8. This assertion was consistent with the assertion of Topps' counsel who stated that the only other expert he contacted had also done consulting work for Stani. Affidavit of David G. Ebert, dated February 28, 2001, at ¶ 13. Thus, this is not a case where there are an abundance of experts from which to chose were Mr. Boutin to be disqualified.
In sum, the record presented to the Court does not meet Stani's burden of showing that Mr. Boutin should be disqualified. Accordingly, the Court rejects Stani's objections to Topps' selection of Mr. Boutin as an expert. Topps' motion is thus granted.
Location of Depositions
The second motion in this case is brought by Topps to compel certain officers of Stani to appear for depositions in New York. There is no dispute that these individuals have been properly designated under Fed.R.Civ.P. 30(b)(6). The sole question is the location of these depositions.
As Stani properly points out, there is a presumption that the deposition of a defendant will take place at the location of the defendant's residence. See, e.g., Mill-Run Tours, Inc. v. Khashoggi, 124 F.R.D. 547, 550 (S.D.N.Y. 1989). This presumption is based on the notion that the plaintiff, having brought litigation and having exercised a choice as to where it would be conducted, cannot be heard to complain that a deposition is taking place in an inconvenient location. See, e.g., Farquhar v. Shelden, 116 F.R.D. 70, 72 (E.D. Mich. 1987).
This presumption is defeated, naturally, where a plaintiff is constrained to choose a particular forum. See, e.g., Devlin v. Transportation Communications International Union, 2000 WL 28173 (S.D.N.Y. 2000); Doe v. Karadzic, 1997 WL 45515 (S.D.N.Y. 1997). In this case, there existed a clause in the agreement at issue in this suit providing that:
This Agreement shall be deemed to have been made, entered into, and finally executed and delivered, in New York, New York, which execution and delivery are hereby acknowledged by both parties hereto, and all rights and duties of the parties hereby shall be governed, controlled, interpreted and defined by and under the laws of the State of New York, without giving effect to rules relating to conflicts of laws, entirely independent of the forum in which this Agreement or any part thereof may come up for construction, interpretation or enforcement. STANI hereby consents to the jurisdiction of the New York federal and state courts for the purpose of resolving any dispute, unless otherwise herein provided, which may arise under this Agreement, and agrees that process in any proceeding commenced hereunder may be made by mail in accordance with the provisions of clause 30.
While the plaintiff characterizes this clause as a forum-selection clause, it is not clearly so worded. The clause provides only that the defendants consent to jurisdiction in New York and that New York law will apply. In the context of fixing the place of a deposition, it cannot have the same force as a true forum selection clause since the litigation theoretically could have been brought anywhere, including Argentina. The clause does not clearly put the defendants on notice that it would suspend the usual presumption that defendants will be deposed at their residence. On the other hand, Stani was certainly on notice when they signed the agreement that they could expect to be haled into a New York court should there be any litigation regarding the agreement. Accordingly, travel to New York on their part — for example, to appear as witnesses at trial on behalf of the defendant — cannot be said to have been an unforeseeable eventuality. Nonetheless, the Court is prepared to accord a slight — albeit defeasible — presumption in favor of the depositions' occurring in Argentina
Turning to costs and convenience, see Mill-Run Tours, Inc. v. Khashoggi, 124 F.R.D. at 550-51, neither side seems to have the stronger hand. The choice is to have two attorneys (and perhaps a court reporter) go to Argentina as opposed to three individuals come to New York. There is certainly inconvenience to counsel in traveling to Argentina; but there is presumably also inconvenience to the three individuals who hold important positions with Stani. The plaintiff has also raised the issue of documents that may be needed during the deposition. While documents may be located here in New York, it is unclear why plaintiffs counsel could not prepare any needed documents in advance and bring them to Argentina. If counsel diligently prepares such documents, and it turns out during the deposition that a critical document was unavailable, the plaintiff has leave to apply to the Court for an appropriate remedy.
All in all, the cost and convenience analysis is insufficient to outweigh the slight presumption accorded the defendant on this question. Accordingly, the Court will order that these three depositions take place in Argentina.
Nonetheless, given the closeness of this question and the fact that Stani clearly understood that New York courts would have jurisdiction over this matter, the Court makes the following additional provision: Topps shall have the option of requiring Stani to bear the burden of ensuring that a qualified court reporter appears at the deposition. Should Topps opt to place this burden on Stani, Stani may choose either to arrange for the presence of a court reporter located currently in Argentina or may arrange to have one brought from the United States (provided a court reporter's entry for this purpose is consistent with the laws of Argentina). In the event that Topps gives Stani responsibility for making this arrangement, any expenses for securing the presence of a court reporter from the United States, including but not limited to any travel or lodging expenses, shall be paid for by Stani.
Should a reporter be located in Argentina, a United States consular official will presumably be required to administer the appropriate oath. In such event, Topps shall also have the option of requiring Stani to arrange for the presence of an official to administer this oath.
Finally, at the conclusion of the case, the reasonable travel and lodging costs of the plaintiff's attorney for the taking of these depositions shall be taxed as costs in the event the plaintiff is awarded costs.
The parties are free to stipulate to any other arrangement for these depositions without seeking leave of the Court.
SO ORDERED.