Opinion
No. 1 CA-SA 13-0321
01-21-2014
MICHELIN NORTH AMERICA INC., Petitioner, v. THE HONORABLE JOHN REA, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA, Respondent Judge, & SANDRA VELO, individually and as natural mother and next friend of MARY ANN OLIVAS, ANTHONY OLIVAS, JR., and RAFAEL OLIVAS, minors; ANTOINETTE OLIVAS, a single woman; MARCOS OLIVAS, individually; MARY ANN VALDEZ, a single woman; IRMA OLIVAS, surviving mother of ANTHONY OLIVAS , SR., deceased, individually and as Statutory Plaintiff on behalf of statutory beneficiaries: ARIANA OLIVAS, KARINA OLIVAS, JOSHUAVENJOSEPH OLIVAS; MARY ANN OLIVAS, ANTHONY OLIVAS, JR.; and RAFAEL OLIVAS, minors; MARCOS OLIVAS, CASSANDRA OLIVAS, and ANTOINETTE OLIVAS; LLANTERA CHANDLER HEIGHTS LLC d/b/a EL MIL AMORES TIRES a/k/a LLANTERA MIL AMORES a/k/a MIL AMORES #10, an Arizona limited liability company, sole proprietorship or partnership; MARTIN CHACON and JANE DOE CHACON, a married couple d/b/a MIL AMORES TIRES #10; DAVID Q. CHACON and JANE DOE CHACON, a married couple d/b/a MIL AMORES TIRES #10; MARIO CHACON and JANE DOE CHACON, a married couple d/b/a MIL AMORES TIRES #10; LAURO CHACON and JANE DOE CHACON, a married couple d/b/a MIL AMORES TIRES #10; ESPINOZA ENTERPRISES LLC, an Arizona limited liability company d/b/a JUVES AUTO CLINIC, Real Parties in Interest.
QUARLES & BRADY LLP, Phoenix By C. Bradley Vynalek, Lauren Elliott Stine, Ryan S. Patterson YUKEVICH/CAVANAUGH, Los Angeles, CA By James J. Yukevich, Cristina M. Ciminelli, K. Noelle Ponsetto, Chris S. Pacetti NELSON MULLINS, Atlanta, GA By Elizabeth C. Helm Counsel for Petitioner LUIS P. GUERRA, LLC, Phoenix By Luis P. Guerra, David C. Shapiro GOLDBERG & OSBORNE, Tucson By John E. Osborne, William C. Bacon, Maria del Pilar Mendoza Kristin J. Schriner LAW OFFICES OF JOSUE-ALFONSO MUNOZ S., Phoenix By Josue-Alfonso Munoz S. Juvenal Espinoza, Phoenix Pro Se Counsel for Real Parties in Interest
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Petition for Special Action from the Superior Court in Maricopa County
No. CV2012-007346
The Honorable John Christian Rea, Judge
JURISDICTION ACCEPTED; RELIEF GRANTED
COUNSEL
QUARLES & BRADY LLP, Phoenix
By C. Bradley Vynalek, Lauren Elliott Stine, Ryan S. Patterson
YUKEVICH/CAVANAUGH, Los Angeles, CA
By James J. Yukevich, Cristina M. Ciminelli, K. Noelle Ponsetto,
Chris S. Pacetti
NELSON MULLINS, Atlanta, GA
By Elizabeth C. Helm
Counsel for Petitioner
LUIS P. GUERRA, LLC, Phoenix
By Luis P. Guerra, David C. Shapiro
GOLDBERG & OSBORNE, Tucson
By John E. Osborne, William C. Bacon, Maria del Pilar Mendoza
Kristin J. Schriner
LAW OFFICES OF JOSUE-ALFONSO MUNOZ S., Phoenix
By Josue-Alfonso Munoz S.
Juvenal Espinoza, Phoenix
Pro Se
Counsel for Real Parties in Interest
MEMORANDUM DECISION
Judge Samuel A. Thumma delivered the decision of the Court, in which Presiding Judge Randall M. Howe and Judge Patricia A. Orozco joined. THUMMA, Judge:
¶1 Petitioner Michelin North America, Inc., is a defendant in this wrongful death suit brought by Plaintiffs/Real Parties in Interest arising out of an August 2011 fatal car accident. Plaintiffs claim the accident was caused by the failure of a tire manufactured in Michelin's Dothan, Alabama plant in 2001. This special action arises out of a November 2013 superior court order granting Plaintiffs' request for an inspection of the Dothan plant.
¶2 After Plaintiffs filed suit in April 2012, formal disclosure and discovery implicated Michelin's confidential and trade secret information. Accordingly, in February 2013, the superior court issued a Protective Order prohibiting Plaintiffs, their counsel and their experts from using in any other case documents identified by Michelin as confidential in this case (and prohibiting the use of such information in any other case).
¶3 Even before the issuance of this February 2013 Protective Order, Plaintiffs informally requested "an inspection" of the Dothan plant, a request Michelin declined. In March 2013, Plaintiffs filed a "Motion to Compel Inspection of Michelin's Plant Where Tire Was Manufactured," claiming "Arizona law requires the inspection." The motion also claimed that, without the plant inspection, Plaintiffs would be "deprived of their ability to obtain relevant information and evidence concerning Michelin's manufacturing processes" (referencing 20 generalized topics) and that the February 2013 Protective Order fully protected Michelin's confidential and trade secret information.
¶4 Michelin opposed the motion and moved for a protective order prohibiting the inspection. In doing so, Michelin attached an affidavit of Michael G. Riley, quality assurance manager at the Dothan plant both when the tire was manufactured and at present. Michelin claimed the manufacturing processes at the plant were trade secrets, that Plaintiffs had not met their burden to obtain a plant inspection, that the tire at issue was no longer manufactured at the plant (and the processes and conditions at the plant had changed substantially in the 12 years since the tire had been manufactured) and that the inspection would not lead to the discovery of relevant information. Plaintiffs' reply echoed arguments in their motion and attached an affidavit from their testifying expert Troy Cottles, stating that a plant inspection would provide potentially important information that is not otherwise available.
In briefing the issue, the parties cited and attached unpublished decisions from other jurisdictions, none of which properly could have been considered. See, e.g., Ariz. R. Civ. App. P. 28(c); Kriz v. Buckeye Petroleum Co. Inc., 145 Ariz. 374, 377 n.3, 701 P.2d 1182, 1185 n.3 (1985).
¶5 In May 2013, after hearing oral argument, the superior court denied Plaintiffs' motion to compel and granted Michelin's motion for a protective order prohibiting the plant inspection. In doing so, the court found that Mr. Riley's affidavit contained "a legitimate claim of trade secrets" and that the record contained "evidence that these machines and processes are trade secrets." The court also stated the rulings were "based on the state of the record to date. Once the deposition of Michael Riley has been taken and the Plaintiffs' expert reports are produced, the Court may revisit [Michelin's] Motion and issue a ruling based on the information disclosed."
¶6 At a status conference on November 19, 2013, Plaintiffs orally raised the plant inspection issue. Although Plaintiffs had submitted a list of issues to discuss at that hearing, the list did not include the plant inspection. Perhaps as a result, although Plaintiffs had deposed Mr. Riley on October 16, 2013, no transcript of that deposition was provided to the court before or at the November 2013 hearing. Similarly, although Plaintiffs had provided expert disclosures, the record does not indicate that those disclosures were provided to the court before or at the November 2013 hearing.
¶7 The plant inspection discussion during the November 2013 hearing is interspersed with various other topics and, at various points, both Michelin and Plaintiffs stated they wanted to further brief the issue. Ultimately, the court concluded
The renewed request for the plant inspection is granted. You can arrange the plant inspection. We will - it is within theIn denying Michelin's various oral motions to reconsider, the court repeated that Plaintiffs are "going to do the plant inspection, and, again, we won't know whether there's any - any relevant evidence to be discovered until it happens." The resulting written order states "Plaintiffs' renewed request for plant inspection is granted."
scope of the protective order, and this -- the granting of the plant inspection says nothing about whether any relevant evidence -- whether evidence is relevant or not. We won't know until the plant inspection occurs.
¶8 Days later, Michelin filed this Special Action. At Michelin's request, and over Plaintiffs' objection, this court stayed the plant inspection until further order.
I. Special Action Jurisdiction.
¶9 Special action jurisdiction is appropriate when no equally plain, speedy, and adequate remedy is available by appeal. Ariz. R.P. Spec. Act. 1(a); Arpaio v. Figueroa, 229 Ariz. 444, 446, ¶ 5, 276 P.3d 513, 515 (App. 2012). "Although appellate courts 'do not routinely entertain petitions for extraordinary relief on discovery matters,' special action jurisdiction may be appropriate because a discovery order is not immediately appealable." Figueroa, 229 Ariz. at 446, ¶ 5, 276 P.3d at 515 (quoting Am. Family Mut. Ins. Co. v. Grant, 222 Ariz. 507, 511, ¶ 10, 217 P.3d 1212, 1216 (App. 2009)). When a discovery order raises important issues of law, including implicating discovery of confidential and trade secret information, exercise of special action jurisdiction is particularly appropriate. See Brown v. Superior Court, 137 Ariz. 327, 330, 670 P.2d 725, 728 (1983); State v. Fields, 196 Ariz. 580, 581, 2 P.3d 670, 671 (App. 1999) (accepting special action jurisdiction to review order requiring inspection of crime laboratory). Because the issue presented satisfies these criteria, in exercising its discretion, this court accepts special action jurisdiction. See Ariz. R.P. Spec. Act. 1(a).
II. The Plant Inspection Order.
¶10 Michelin argues (1) it was deprived of any advance notice and meaningful opportunity to respond before the issuance of the plant inspection order at the November 2013 hearing and (2) Plaintiffs have not satisfied their burden to justify the plant inspection order. The court addresses those issues in turn.
A. Notice And An Opportunity To Respond.
¶11 Plaintiffs' request for a plant inspection was not listed as an issue to be addressed at the November 2013 hearing. The parties, however, had briefed the issue previously. In May 2013, the superior court also put the parties on notice that it "may revisit" the issue later. The court then revisited the issue at the November 2013 hearing where the parties had an opportunity to be heard. Because the parties had fully briefed the issue and had notice that the court might revisit the issue, and because Michelin had an opportunity to be heard at the November 2013 hearing, Michelin was not improperly deprived of notice and an opportunity to respond to Plaintiffs' plant inspection request.
B. The Merits Of The Plant Inspection Order.
¶12 Although expressing an interest in the transcript of Mr. Riley's deposition and Plaintiffs' expert disclosures in denying the plant inspection in May 2013, in granting the plant inspection in November 2013, the court did not have those materials. Accordingly, in this significant respect, the factual record before the court at the November 2013 hearing was the same as the factual record in May 2013.
¶13 Plaintiffs' Response to the Petition for Special Action extensively quotes and relies on the transcript of Mr. Riley's deposition. Because the superior court did not have that transcript when granting the plant inspection order, however, it could not have provided a basis for that order. Plaintiffs' experts apparently have disclosed their final opinions without a plant inspection. Moreover, Michelin claims (and Plaintiffs do not dispute) that "[n]owhere in [Plaintiffs'] disclosures do any of the experts identify a need (or even a desire) to conduct a [p]lant inspection in order to offer their opinions in the case."
Plaintiffs filed selected pages from Mr. Riley's deposition transcript in superior court on November 27, 2013, more than a week after the November 19, 2013 plant inspection order and a few hours before that court granted Michelin's stay request. Accordingly, this court denies Michelin's motion to strike that transcript and related citations in Plaintiffs' Response to the Petition for Special Action and denies as moot Plaintiffs' alternative motion to supplement the record. The fact remains, however, that the transcript of Mr. Riley's deposition was not provided to the superior court prior to the issuance of the plant inspection order, meaning that transcript could not have provided a basis for that order.
¶14 This similarity in the factual record also means that the court's statements in May 2013 that Michelin "had a legitimate claim of trade secrets" and had produced "evidence that these machines and processes are trade secrets" remained valid in November 2013. See also Arizona Revised Statute (A.R.S.) section 44-401(4) (2014). Notwithstanding Plaintiffs' arguments to the contrary before this court, the superior court record supports these findings and that court properly found Michelin's trade secrets are implicated by any plant inspection.
¶15 Arizona law provides that "[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action." Ariz. R. Civ. P. 26(b)(1)(A). The court stated at the November 2013 hearing that "the granting of the plant inspection says nothing about whether any relevant evidence - whether evidence is relevant or not. We won't know until the plant inspection occurs." The court then repeated "we won't know whether there's . . . any relevant evidence to be discovered until it happens." Although Plaintiffs argue to the contrary before this court, they have not shown how this observation was erroneous, particularly given the passage of time between when the tire at issue here was manufactured (2001) and the possible inspection date (more than 12 years later) and the changes at the plant during those dozen years. Morton v. Cooper Tire & Rubber Co., 288 F.R.D. 126, 132 (N.D. Miss. 2012) (discussing, in dicta, cases denying plant inspections five and six years after a tire at issue was manufactured, with "significant changes" in the processes, and where specific tires were no longer manufactured) (citation omitted).
¶16 Along with the unchanged factual record, the implication of trade secrets and the conclusion that relevance could not be determined prior to an inspection, Plaintiffs' plant inspection request was not based on a specific, demonstrable need for discovery on a specified aspect of Michelin's manufacturing process at the time the tire at issue was manufactured. See id. at 132 (distinguishing narrowly-tailored, targeted request for inspection of a specific machine from "other cases [where] the plaintiff sought carte blanch inspection") (citing cases). Plaintiffs requested the plant inspection to learn generally about "Michelin's manufacturing processes, including but not limited to" 20 generalized topics without temporal limitation. Apparently as a result, the plant inspection order states in its entirety: "Plaintiffs' renewed request for plant inspection is granted." The order does not limit the inspection in time, manner, scope or duration; does not specify who may participate in the inspection, whether the inspection will be recorded or videotaped, whether the inspection will be narrated, guided or perambulatory and does not specify how any disputes during the inspection should be handled if, for example, the parties disagree on what can, should or cannot be viewed or discussed.
Plaintiffs also stated that, without the plant inspection, they would "be unable to reasonably prepare to cross-examine Michelin employees, representatives and experts, to challenge the veracity, truthfulness, reliability and trustworthiness of their testimony, documents, reports, statements, interviews, and investigations concerning the manufacturing process, obtain foundation for expert opinions, determine areas of testimony, litigate this case, and reasonably prepare for trial." The record, however, indicates that tire failure cases often are resolved without plant inspections.
¶17 Although asserting Arizona law "requires the inspection of the plant," Plaintiffs cite no Arizona case requiring such an inspection and this court has found none. In opposing special action relief, Plaintiffs cite three Arizona cases, none of which address plant inspections. Torres v. North American Van Lines affirmed a remittitur of a jury's damage award, an issue not presented here. 135 Ariz. 35, 40, 658 P.2d 835, 840 (App. 1982). Schwartz v. Superior Court accepted special action jurisdiction over a discovery order and granted relief, finding an abuse of discretion in failing to quash a subpoena. 186 Ariz. 617, 621, 925 P.2d 1068, 1072 (App. 1996).
¶18 The final case Plaintiffs cite -- Cornet Stores v. Superior Court, 108 Ariz. 84, 492 P.2d 1191 (1972) - was a special action from a discovery order compelling interrogatory answers involving confidential, and perhaps trade secret, information. 108 Ariz. at 86-88, 492 P.2d at 1193-95. Finding the information sought was "directly relevant," Cornet noted that "'[i]f the information sought is relevant and necessary at the discovery stage of the litigation to the preparation of the case . . . disclosure will be required.'" 108 Ariz. at 88, 492 P.2d at 1195 (citation omitted). As applied, by contrast, the court could not determine whether the plant inspection would yield relevant information. Moreover, in this case, Plaintiffs' experts apparently have offered their final opinions without a plant inspection and without stating that such an inspection is necessary.
¶19 Plaintiffs claim the February 2013 Protective Order limiting use of documents Michelin identifies as confidential further supports the plant inspection order. The existence of such a protective order, however, does not eliminate the burden of a party seeking discovery to show that the discovery sought is proper under the Arizona Rules of Civil Procedure. Moreover, it is not clear that information learned during a plant inspection would be within the scope of the Protective Order.
¶20 The February 2013 Protective Order is limited to "Confidential Information," defined as "documents identified by [Michelin] as 'CONFIDENTIAL,'" and "Confidential Documents." A plant inspection is not a document and, as a result, is not a document that could be identified as confidential. Similarly, a plant inspection cannot be destroyed or returned to Michelin at the conclusion of the case, as the Protective Order requires Plaintiffs, their counsel and their experts to do. Similarly, confidential documents subject to the Protective Order are to be used in this case only. As Michelin notes, Plaintiffs' expert Troy Cottles "is a well-known expert in the tire industry and has provided hundreds of depositions. Asking him to limit what trade secret information he learns in this case to this case only is an impossible task."
If the plant inspection was subject to the Protective Order, given the restrictions contained in that order, it is unclear how those participating in the plant inspection on behalf of Plaintiffs could have any involvement with other tire failure cases.
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¶21 The scope of permissible discovery is broad and a court is vested with broad discretion in addressing discovery. See Daniel J. McAuliffe & Shirley J. McAuliffe, Arizona Civil Rules Handbook at 372, 383 (2011 ed.) (citing authority). On this unique record, however, given the finding that the plant inspection would implicate trade secrets; the breadth of the plant inspection request and order; the passage of more than a dozen years since the tire was manufactured (and the changes at the plant during that time); the uncertainty whether the inspection would yield relevant evidence and the various other issues addressed above, the superior court erred in issuing the plant inspection order. Accord In re Cont'l Tire N. Am., Inc., 74 S.W.3d 884, 885 (Tx. App. 2002) (vacating, on mandamus review, trial court's order for inspection of tire plant); cf. Fields, 196 Ariz. at 581, 2 P.3d at 671 (vacating, on special action review, order granting pretrial physical inspection of crime lab "for purposes of observing and videotaping the personnel, equipment, and procedures used in analyzing blood"). Accordingly, that portion of the November 19, 2013 order granting Plaintiffs' renewed request for plant inspection is vacated; the stay of that order by this court is vacated as moot; Michelin is granted its costs incurred in this special action pursuant to Ariz. R.P. Spec. Act. 4(g) upon compliance with Ariz. R. Civ. App. P. 21 and this matter is remanded to the superior court.