Opinion
Cause No. 1:02-CV-20
February 20, 2003
MEMORANDUM OF DECISION AND ORDER
I. INTRODUCTION
This matter is before the Court on the Plaintiff's January 17, 2003, motion to compel responses to interrogatories (Docket No. 40) and the Defendant's January 24, 2003, motion for a protective order. (Docket No. 43.) On January, 28, 2003, the Court heard argument on these motions, and ordered the parties to submit supplemental briefs on the Plaintiff's motion to compel. Those briefs have now been filed and this case is ripe for ruling. For the following reasons, the Plaintiff's motion to compel will be GRANTED in part and DENIED in part.
Jurisdiction of the undersigned Magistrate Judge is based on 28 U.S.C. ss 636(c), all parties consenting.
At the January 28, 2003, hearing, Plaintiff's counsel indicated that they had no objection to the Defendant's motion for a protective order regarding Interrogatory 22. Accordingly, the Defendant's motion for a protective order will be GRANTED.
II. THE PROCEDURAL AND FACTUAL BACKGROUND
The Plaintiff filed this action on January 22, 2002, alleging that the Defendant infringed on its copyright for "Automotive Discount Checks," and engaged in unfair competition and trade dress infringement, by distributing substantially similar discount checks. (See generally Pl.'s Am. Compl.)
On June 14, 2002, the Plaintiff propounded interrogatories to the Defendant, including Interrogatory 10, asking the Defendant to "[s]tate in round figures the total number of Checks distributed by Defendant," and Interrogatory 11, asking it to "[l]ist the total number of Checks distributed by Defendant per month, from the first month Defendant began distributing the Checks to the present." (Pl.'s M. to Compel, Ex. A at 5.)
On July 17, 2002, the Defendant filed its answers to these interrogatories, objecting to Interrogatories 10 and 11 as vague and irrelevant, and it now contends that Interrogatories 10 and 11 are simply irrelevant to any issue in this case, and that responding to them would subject it to an undue burden.
The Plaintiff, in turn, argues that the information sought in Interrogatories 10 and 11 are relevant to the issue of actual damages under the "value of use" theory, and that the Defendant should not be allowed to avoid answering them simply because it will entail the review of substantial documentation.
III. DISCUSSION A. Relevancy
The Defendant objects to Interrogatories 10 and 11 as irrelevant because the information sought (i.e., the number of checks it distributed) "does not affect the dispositive and material inquiries in this case, i.e., whether [the Defendant] engaged in the `unauthorized use of [the Plaintiff's] copyrighted Automotive Discount Checks[.]" (Def.'s Jan. 24, 2003, Resp. Br. at 3.) The Federal Rules of Civil Procedure provide that "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party[.] Fed.R.Civ.P. 26(b)(1). "Relevancy" under Rule 26 is only "`minimal relevance,' which means it [need only be] reasonably calculated . . . [to] lead to the discovery of admissible evidence," Teichgraeber v. Memorial Union Corp. of Emporia State University, 932 F. Supp. 1263, 1265 (D.Kan. 1996) (quoting Snowden By and Through Victor v. Connaught Lab., 137 F.R.D. 325, 329 (D.Kan. 1991)); Fed.R.Civ.P. 26(b)(1), and is construed broadly to include "any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978); see also In re Theragenics Corp. Securities Litigation, 205 F.R.D. 631, 636 (N.D.Ga. 2002).
Thus, while the information regarding the number of checks distributed by the Defendant may not be relevant to the issue of liability under the Copyright Act of 1976, 17 U.S.C. § 501, it is certainly relevant in assessing the Plaintiff's damages. After all, 17 U.S.C. § 504(a) allows a successful plaintiff to elect between either statutory damages, 17 U.S.C. § 504(a)(2), or actual damages and the additional profits reaped by the infringer as a result of the infringement. 17 U.S.C. § 504(a)(1). This is important because if the Defendant's contention is accepted, then we necessarily limit the Plaintiff to only statutory damages, in contradiction to § 504(a).
Nevertheless, the Defendant suggests that Interrogatories 10 and 11 are still irrelevant because the Plaintiff has not demonstrated precisely how the information sought would be used to calculate actual damages.
However, the Plaintiff has properly identified its proposed actual damages theory and has sufficiently articulated how information regarding the number of allegedly infringing checks would be used. Indeed, since the Defendant claims that its checks did not generate any income, let alone profit, see Def.'s Ans. to Pl.'s Interrog. 13, the Plaintiff may be required to demonstrate actual damages under the "value of use" theory. Under this theory, where the infringement does not produce a profit to the infringer or where the losses to the copyright owner are difficult to quantify, a successful plaintiff may recover the amount that "`a willing buyer would have reasonably been required to pay to a willing seller for plaintiff's work.'" Deltak, Inc. v. Advanced Systems, Inc., 767 F.2d 357, 363 (7th Cir. 1985) (quoting Sid Marty Crofft Television Productions, Inc. v. McDonald's Corporation, 562 F.2d 1157, 1174 (9th Cir. 1977)). On this score, the Plaintiff's listed licensing fee per check is some evidence, although not conclusive, of the fair market price. Id. Thus, if the case proceeds to the damages stage, under the value of use theory, the Defendant may be liable for actual damages in the amount equal to the licensing fee charged for each infringing check distributed, and, at this stage in the litigation, the Plaintiff should be entitled to know how many checks the Defendant distributed so it can decide whether to pursue statutory or actual damages. In other words, the information sought in Interrogatories 10 and 11 is clearly relevant.
While the Defendant faults the Plaintiff for not attempting to establish damages under one of several other damages theories, we need not address that contention here since it is clear the value of use theory is appropriate under the facts of this case.
B. Burdensomeness
Still, the Defendant contends that even if Interrogatories 10 and 11 are relevant, it should not have to answer them because the burden and expense of doing so outweighs their likely benefit; more specifically, answering Interrogatories 10 and 11 will require a review of more than 200,000 transaction documents to determine the date, an expensive process considering it will take more than 100 man hours.
Rule 26(b) provides that the Court may limit discovery if "the burden or expense of the proposed discovery outweighs its likely benefit, 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." Fed.R.Civ.P. 26(b)(2)(iii).
In assessing those factors here, eliciting information regarding the total number of checks distributed, as requested in Interrogatory 10, is clearly necessary so the Plaintiff can determine or elect actual damages. However, while Interrogatory 10 precisely corresponds to a proposed actual damages theory, Interrogatory 11 asks the Defendant to expend needless effort organizing the same information by month. Why this effort should be imposed is not argued, and the Court can see no useful benefit, particularly since the value of use theory is only concerned with the total number of checks distributed.
Thus, while the Court agrees with the Defendant that the burden of answering Interrogatory 11 "outweighs its likely benefit," see Fed.R.Civ.P. 26(b)(2)(iii), Interrogatory 10 is narrowly tailored to secure the information required to determine actual damages, and should be answered.
CONCLUSION
For the foregoing reasons, the Plaintiff's motion to compel (Docket No. 40) is GRANTED as to Interrogatory 10, but DENIED as to Interrogatory 11. The Defendant's motion for a protective order (Docket No. 43) is GRANTED.
SO ORDERED.