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Rockwell Automation, Inc. v. Radwell International, Inc.

United States District Court, D. New Jersey, Camden Vicinage

April 25, 2019




         This Opinion and Order addresses the parties' dispute regarding plaintiff's privilege designations.[1] The Court received plaintiff's March 14, 2019 letter brief (“LB”), defendant's March 28, 2019 response, and heard oral argument. Given the substantial number of plaintiff's privilege designations, and the impracticability of reviewing all of plaintiff's documents in camera, the Court directed defendant to designate fifty (50) representative documents to specifically challenge.[2] The Court reviewed the designated documents in camera. For the reasons to be discussed, the Court sustains and overrules plaintiff's privilege assertions. As to the privilege assertions that are sustained, the Court will not direct plaintiff to produce any additional documents from these categories.[3] As to the privilege assertions that are overruled, the Court directs plaintiff to review its privilege log to produce the documents in the same category as the documents the Court rules are not protected.[4]


         Since the parties are obviously familiar with the background of the case, a detailed summary will not be set forth. The Court incorporates by reference the discussion in its January 28, 2019 Oral Opinion denying and granting in part defendant's request for GPOS data. See Transcript at 3:25 to 11:10, Doc. No. 370. Plaintiff is the world's largest company dedicated to industrial automation. Plaintiff's products are sold to customers by its authorized distributors. Defendant also sells industrial automation products, including plaintiff's products, but is not an authorized distributor. Plaintiff contends defendant's sales of its products violates trademark and unfair competition laws. Defendant is pursuing an antitrust counterclaim. The stay in the case was recently lifted after the parties' International Trade Commission (“ITC”) proceedings (1074 and 1105) were completed. For background purposes the Court adds that plaintiff's attorney-client privilege and work-product assertions are supported by the Declarations (“Decl.”) of John Miller, Esquire, Vice President and Chief I.P. counsel, Kathleen Bentley, Director of Global Programs, Rodney Michael, Director Global Market Access, and Kathleen S. Donius, Esquire, Associate General Counsel.


         Defendant challenges plaintiff's assertion of the attorney-client privilege and work-product doctrine to protect from discovery plaintiff's documents. As to the general legal principals to apply, these are straightforward, largely non-controversial, and have been set forth in numerous Opinions of the Court. See, e.g., In re Riddell Concussion Reduction Litigation, C.A. No. 13-7585 (JBS/JS); 2016 WL 7108455 (D.N.J. Dec. 5, 2016); Nanticoke Lenni-Lenape Tribal Nation v. Porrino, C.A. No. 15-5645 (RMB/JS), 2017 WL 4155368 (D.N.J. Sept. 19, 2017); TD Bank, N.A. v. Hill, C.A. No. 12-7188 (RBK/JS), 2014 WL 12617548 (D.N.J. Aug. 20, 2014). Since the parties are already familiar with these general principles and in fact cite to the Court's Opinions, the Court will proceed to the crux of the parties' dispute.

         Plaintiff argues most of the documents at issue are protected by the work-product doctrine. A party seeking to invoke this doctrine must prove two elements. First, that a document was prepared for reasonably anticipated litigation. Second, that the document was prepared because of the prospect of litigation. Riddell, at *6.

         After reviewing the entire record in detail, including the documents at issue in camera, the Court finds that plaintiff properly asserted the work-product doctrine for most of its documents.[5] The record reflects that in 2014 plaintiff commenced a targeted investigation of defendant and other potential “gray-market resellers” to prepare for litigation. See Miller Decl. ¶5; Bentley Decl. ¶5; Michael Decl. ¶7. Plaintiff focused its investigative efforts on the sale of its products through sources other than its authorized distributors.

         Defendant argues plaintiff's investigation was done for a business purpose because plaintiff conducted gray-market investigations going back as far as 2004. However, even if true, this does not detract from the fact that starting in 2014 plaintiff's investigation specifically targeted defendant and others for litigation purposes. Further, given the declarants' specific averments about targeting defendant, the Court rejects defendant's assertion that there was only a “remote possibility of litigation” and that plaintiff did not show an “identifiable specific claim of impending litigation.”[6]

         To repeat, the fact that defendant was specifically targeted for a litigation related investigation is supported by plaintiff's Declarations. Spurred by the fact that plaintiff learned a purported systems integrator, LEC, was supplying large amounts of its products to defendant, Miller attested (¶¶5-7) that “[i]n 2014, Rockwell Automation conducted a targeted investigation into Radwell's operation in the gray market for the specific purpose of preparing for litigation against Radwell….” The Court's in camera review corroborated Miller's statement. The Court does not credit defendant's argument that plaintiff's serialization effort was independent of plaintiff's investigation for anticipated litigation. Miller stated, “[t]he primary motivator for implementing serialization was to identify gray-market reseller targets for enforcement action, including potential litigation.” Id. ¶16.

         To the extent defendant argues plaintiff waived the work-product doctrine by sharing its documents with its employees and distributors, the argument is rejected. The waiver of the work- product doctrine is different than the waiver of the attorney-client privilege. “The predicate of the waiver inquiry in the work-product context is not, as it is in the attorney-client context, whether the material was disclosed, but whether the material was disclosed to an adversary.” Cooper Health System v. Virtua Health, Inc., 259 F.R.D. 208, 215 (D.N.J. 2009)(citation omitted). The essential question with respect to waiver of work-product is whether the material has been kept away from adversaries. Id. The party alleging that a waiver occurred has the burden of proof on the waiver issue. Id. Plaintiff's employees and distributors were not plaintiff's adversaries and therefore no waiver occurred. Further, since plaintiff shared a common interest with these individuals, this prevents a waiver of the work-product doctrine. In O'Boyle v. Borough of Longport, 218 N.J. 168, 186 (2014), the Court noted the protections offered by the attorney-client privilege and work-product doctrine are not waived by disclosure to a third party if the “person to whom disclosure of confidential attorney-client communications is necessary to advance the representation.” Plaintiff's employees and distributors fit into this description.

         The Court does not dispute the notion that many of plaintiff's documents reflect a joint legal and business purpose. However, the Court concludes the “dominant purpose” in preparing the protected documents was the concern about objectively foreseeable and specifically identifiable litigation. Riddell, 2016 WL 7109455, at *7. Contrary to defendant's argument, the protected documents were not prepared as part of plaintiff's “ordinary course of business.” This distinguishes the protected documents from at least two instances where the Court directed alleged privileged documents to be produced because they were prepared as part of a party's regular business. See, e.g., Robinson v. Winslow Twp., C.A. No. 11-530 (NLH/JS), 2012 WL 113643 (D.N.J. Jan. 13, 2012); Littlejohn v. Vivant Solar, C.A. No. 16-9446 (NLH/JS), 2018 WL 6705673 (D.N.J. Dec. 20, 2018).

         Defendant argues the work-product doctrine does not apply because “Rockwell admits, its non-lawyer business people at all times controlled and executed the ‘gray market' strategy.” LB at 5. However, defendant ignores the fact Bentley states she worked closely with Miller in connection with her work. Bentley Decl. ¶8. She also stated she “worked in consultation with the legal department.” Id. ¶4. Further, Miller states he directed the actions of Bentley. Miller Decl. ¶3. In addition, Bentley was promoted, “in large part to bolster the efforts to monitor the gray market so that Rockwell Automation could take legal action to enforce its rights.” Id. ¶8; see also id. ¶10 (“Ms. Bentley's and Mr. Michael's investigative efforts were guided by near constant direction from Rockwell Automation's legal department…”). The fact that not all of the protected documents were prepared by counsel is of no moment. A document may be protected even if it was prepared by an attorney's agent. Riddell, 2016 WL 7108455, at *7.

         Defendant argues, “Rockwell has made no effort to explain how ‘investigative documents' created and distributed among Rockwell business employees that almost never mention or involve attorneys were possibly created for pending or anticipated litigation.” LB at 12. To the contrary, the averments in plaintiff's Declarations, cited infra, aptly demonstrate that the work of Bentley, Michael, etc. was done in anticipation of specifically identifiable objectively foreseeable litigation involving defendant. Also, that the documents were prepared under the direction of an attorney for the attorney's benefit to use in the anticipated litigation. As the Court has noted, ‚Äúdocuments exchanged between [a party's] employees may be work-product even ...

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