United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
COMPEL AND PLAINTIFF'S CROSS-MOTION FOR PROTECTIVE
ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE.
pending before the Court is a discovery dispute concerning
certain discovery requests that seek information relating to
Plaintiff Controlled Kinematics, Inc.'s
(“CKI”) daily activities and interactions with
Defendant Novanta Corporation's (“Novanta”)
competitors. For the reasons explained herein, Novanta's
motion to compel [ECF No. 33] is GRANTED in part and
DENIED in part, and CKI's cross-motion for a
protective order [ECF No. 39] is GRANTED in part and
DENIED in part.
an independent sales representative for manufacturers of
precision motion control solutions, such as Novanta. [ECF No.
27 (“Amended Complaint” or “Am.
Compl.”) ¶¶ 1, 11]. Novanta supplies
photonics and motion control components to original equipment
manufacturers in the medical and advanced industrial
technology markets. [Id. ¶ 12]. CKI has worked
as an independent sales representative for Novanta's
subsidiaries, MicroE Systems, Inc. (“MicroE”) and
Applimotion, Inc. (“Applimotion”) and currently
does work for one of Novanta's competitors, Allied
Motion. [Id. ¶¶ 14-15, 20; ECF No. 39 at
2000, MicroE hired CKI as an independent sales agent. [Am.
Compl. ¶ 15]. In June 2002, CKI and MicroE executed a
written sales contract in which they agreed that CKI would be
paid a 10% commission on sales. [Id. ¶ 16].
Novanta acquired MicroE in 2004. [Id. ¶¶
14, 17]. CKI continued to serve as an independent sales agent
for MicroE following the acquisition. [Id. ¶
18]. Although Novanta initially paid CKI 10% commissions
pursuant to the existing contract, between the time of the
acquisition and December 2014, Novanta repeatedly reduced
CKI's commission rate. [Id. ¶ 23].
December 2014, CKI and Novanta negotiated a new written sales
contract. [Id. ¶¶ 25- 26]. The December
2014 contract provided for a commission rate of 10% and
contained the following term concerning payment of
commissions following termination:
For purchase orders that the Agent has presented to
prior to the effective date of termination, and that GSI then
accepts, in whole or substantial part, within the twelve
month period immediately following the date of termination,
the Agent will be entitled to the compensation that it would
have received under this Agreement if this Agreement had not
been terminated, specifically, but without limitation,
Schedule A, provided, however, that if the Agent has been
terminated for a material breach of this Agreement pursuant
to Subsection 8.2, below, then the Agent will receive no
compensation from GSI for orders accepted after the effective
date of termination.
[Id. ¶¶ 30, 32].
approximately 2000, CKI also started working as an
independent sales agent for Applimotion, which was acquired
by Novanta in 2015. [Id. ¶¶ 14, 20]. CKI
did not have a written contract with Applimotion, but
received 10% commissions that were paid on a monthly basis.
[Id. ¶¶ 20, 34]. CKI continued to work
with Applimotion following the acquisition, and Novanta paid
the 10% commission rate on sales of Applimotion products.
[Id. ¶ 35].
summer of 2015, Novanta rebranded MicroE and Applimotion
products and services under the name “Celera Motion
Group.” [Id. ¶ 36]. Around the same time,
Novanta informed CKI that it wished to renegotiate the
December 2014 contract covering MicroE products and to lower
the commission rate it paid. [Id.]. Contract
negotiations were delayed until February 2016 and continued
through May 2016, but were not successful. [Id.
¶¶ 38-56]. Novanta sought to reduce CKI's
commissions from 10% to 3% and withheld commissions earned
during the first quarter of 2016 on Applimotion products on
the ground that no contract requiring the commissions was in
effect. [Id. ¶¶ 49-51].
3, 2016, Novanta informed CKI that it was being terminated
“without cause” as an independent sales
representative for MicroE and Applimotion products effective
October 1, 2016. [Id. ¶¶ 57, 59-60].
Novanta believed that CKI was “doing essentially
nothing” to earn the $1 million annual commission it
had been receiving and that such a large commission was not
justified based on the minimal work reported by CKI. [ECF No.
18 (Counterclaims) ¶¶ 11-13]. Novanta asserts that
during 2016, CKI actively courted Novanta's competitors
and set up a business to compete directly with Novanta.
[Id. ¶¶ 14-15].
CKI reached out to Novanta in 2017 regarding payment of
commissions earned during the last quarter of 2016, Novanta
refused to pay commissions on MicroE products based on
Novanta's belief that CKI was not entitled to any
commissions because all purchase orders during the quarter
had been generated by Novanta personnel. [Am. Compl. ¶
73]. Novanta also continued to take the position that CKI was
not entitled to commissions on sales of Applimotion products
because there was no written agreement requiring commissions
to be paid. [Id. ¶ 77].
2, 2017, CKI filed this lawsuit against Novanta seeking to
recover sales commissions earned following the October 1,
2016 termination date. [ECF No. 1 ¶ 1
(“Complaint”)]. The Complaint alleged violations
of California's Independent Wholesale Sales
Representative Contractual Relations Act of 1990 (Cal. Civil
Code § 1738.10), violations of Massachusetts General
Laws ch. 104, §§ 7-9, violations of Massachusetts
General Laws ch. 93A, breach of contract, restitution, and
unjust enrichment. [Id. ¶¶ 98-131]. On
November 29, 2017, the Court denied a partial motion to
dismiss. [ECF No. 15]. Novanta answered the complaint on
December 22, 2017 and asserted counterclaims for breach of
contract, restitution, and unjust enrichment. [ECF No. 18
(Counterclaims) ¶¶ 16-27]. On June 5, 2018, CKI
filed the Amended Complaint and added a claim for bad faith
termination. See [Am. Compl. ¶¶ 132-34].
October 10, 2018, Novanta served its First Requests for
Production and First Set of Interrogatories. [ECF No. 37-3].
CKI served responses to the Requests for Production on
November 9, 2018 and to the Interrogatories on November 16,
2018. [ECF Nos. 34-1, 34-2]. On December 13, 2018, CKI
provided a supplement to its November 9, 2018 Responses to
Novanta's First Set of Requests for Production. [ECF No.
December 18, 2018, Novanta filed a motion to compel certain
discovery responses. [ECF No. 33]. On January 11, 2019, CKI
opposed the motion to compel and filed a cross-motion for a
protective order. [ECF Nos. 37, 39]. Novanta opposed the
cross-motion for a protective order on January 25, 2019 and
filed a reply brief in support of its motion to compel on
February 1, 2019. [ECF Nos. 42, 43].
MOTION TO COMPEL
to Federal Rule of Civil Procedure 26(b), parties are
entitled to discovery “regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case.” On a motion
to compel, “[t]he party seeking information in
discovery over an adversary's objection has the burden of
showing its relevance.” Johansen v. Liberty Mut.
Grp., Inc., No. 15-cv-12920-ADB, 2017 WL 6045419, at *1
(D. Mass. Dec. 6, 2017) (citing TG Plastics Trading, Co.
v. Toray Plastics, No. 09-cv-336S, 2010 WL 936221, at *2
(D.R.I. Mar. 12, 2010)); see Karl v. Bizar, No.
2:09-cv-00034, 2009 WL 3418676, at *3 (S.D. Ohio Oct. 19,
2009) (“The proponent of a motion to compel discovery
bears the initial burden of proving that the information
sought is relevant.”). Once a showing of relevance is
made, the party opposing disclosure bears the burden of
showing that the requested discovery is improper. See
Aronstein v. Mass. Mut. Life Ins. Co., No.
15-cv-12864-MGM, 2017 WL 2818993, at *2 (D. Mass. June 29,
courts exercise broad discretion to manage discovery
matters” and “to tailor discovery
narrowly.” Heidelberg Americas, Inc. v. Tokyo Kikai
Seisakusho, Ltd., 333 F.3d 38, 41 (1st Cir. 2003);
Primarque Prod. Co. v. Williams W. & Witt's Prod.
Co., No. 15-cv-30067-TSH, 2016 WL 6090715, at *2 (D.
Mass. Oct. 18, 2016). When exercising this discretion, courts
assess disputed discovery requests in light of the
proportionality considerations articulated in Rule 26(b)(1),
including “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.” See
Fed.R.Civ.P. 26(b)(1); Sustainable Sourcing, LLC v.
Brandstorm, Inc., No. 12-cv-30093-MAP, 2017 WL 217747,
at *2 (D. Mass. Jan. 18, 2017) (“concepts of relevance
and proportionality dictate limits on the discovery to which
Plaintiff is entitled”).
seeks to compel discovery responses from CKI on two topics:
(i) the activities of CKI's employees and (ii) CKI's
work, and preparation to work, for Novanta's competitors.
[ECF No. 34 at 5]. CKI has cross-moved for a protective order
barring discovery of CKI's work as a sales representative
for any company other than Novanta and its predecessors. [ECF
Activities of CKI, Its Principals, and Its Employees
(Novanta's Request for Production No. 26)
intends to defend this lawsuit by demonstrating that CKI did
not earn post-termination sales and therefore is not entitled
to any post-termination commissions. [ECF No. 34 at 7]. In
support of this anticipated defense, Novanta sought to
discover the sales activities of CKI and its employees during
2015 and 2016 in part through Request for Production No. 26
(“RFP No. 26”), which requests: “[a]ll
documents showing what CKI and its principals and employees
were doing on a daily basis in 2015 and 2016, including,
without limitation, calendars, date books and meeting
notices.” [ECF No. 34-2 at 12]. CKI objected to RFP No.
26 as “vague, overbroad, and seek[ing] information not
reasonably calculated to lead to the discovery of admissible
evidence, ” but agreed to produce “calendars and
datebooks [sic] entries concerning efforts by CKI, its
principals and employees, to sell Novanta products.”
contends that the information sought by RFP No. 26 is
“directly relevant to [its] defense that CKI failed to
perform its contractual obligations” under the December
2014 contract concerning sales of MicroE products, which
required that CKI “diligently and actively promote,
sell, support, install, and maintain” MicroE products.
[ECF No. 34 at 7-8]. Novanta further asserts that documents
after October 1, 2016 are relevant ...