United States District Court, D. New Jersey
FASTSHIP, LLC and LIQUIDATING TRUST OF FASTSHIP, INC., Plaintiffs,
LOCKHEED MARTIN CORPORATION and GIBBS & COX, INC., Defendants.
CHRISTOPHER JOHN LEAVELL KLEHR HARRISON HARVEY BRANZBURG LLP,
CHERRY HILL, RAYMOND HOWARD LEMISCH, KLEHR HARRISON HARVEY
BRANZBURG LLP, PHILADEPHIA, GREGORY M. WILLIAMS RICHARD W.
SMITH SCOTT A. FELDER KRYSTAL B. SWENDSBOE WILEY REIN LLP
1776 K STREET N.W. WASINGTON, DONALD E. STOUT FITCH, EVEN,
TABIN & FLANNERY LLP Attorneys for Plaintiffs FastShip,
LLC and the Liquidating Trust of FastShip Inc.
SIGMUND LIECHTENSTEIN, CROWELL & MORING LLP, MICHAEL J.
SONGER, ASTOR H.L. HEAVEN, CROWELL & MORING LLP,
Attorneys for Defendant Lockheed Martin Corporation.
M. WALSH, CHRISTOPHER MATTHEW HEMRICK, WALSH PIZZI
O'REILLY FALANGA LLP, ONE RIVERFRONT PLAZA, PASQUALE A.
RAZZANO, DOUGLAS SHARROTT, JOSH CALABRO, VENABLE LLP
Attorneys for Defendant Gibbs & Cox Inc.
L. HILLMAN, U.S.D.J.
case concerns breach of contract and misappropriation of
trade secrets claims relating to confidential information
shared by Plaintiffs FastShip, LLC and Liquidating Trust of
FastShip Inc. (collectively, "FastShip") with
Defendants Lockheed Martin Corporation (“LMC") and
Gibbs & Cox Inc. (“G&C") when pursuing a
contract with the United States Navy ("U.S. Navy").
The parties are engaged in discovery solely on the statute of
limitations. Presently before the Court is Defendants'
"Appeal of Magistrate Judge Pursuant to Fed.R.Civ.P. 72
and L. Civ. R. 72.1(c)" (the "Rule 72 Motion")
and two joint motions to seal. For the reasons discussed
herein, the Court will grant in part, and deny in part,
Defendants' Rule 72 Motion and will grant the joint
motions to seal.
Court takes its facts from the parties briefing and the
procedural history of the case. Plaintiffs' filed this
action on April 28, 2017 alleging one count of
misappropriation of trade secrets and one count of breach of
contract. After several iterations of complaints and motions
to dismiss, the Court denied Defendants' Motions to
Dismiss. But, the Court noted that it was most prudent to
proceed solely on the statute of limitations question.
Defendants thereafter filed their answers and the parties
proceeded with discovery focused solely on the statute of
the statute of limitations issue has become central to this
matter at this point in the litigation. As relevant to the
issue of privilege considered here, Defendants argue that
Plaintiffs filed their claims well past the time prescribed
in the statute of limitations. Plaintiffs counter that they
did not discover the facts constituting their claims until
they received discovery from the U.S. Navy in other
litigation in 2016. Apparently, those documents revealed that
Defendants disclosed confidential information to third
parties. Defendants, receiving a privilege log from
Plaintiffs, believe certain privileged communications from
years prior may concern the claims asserted here, thus
affecting Plaintiffs' discovery defense.
October 29, 2018, Defendants alerted Magistrate Judge Karen
Williams with a letter memorandum describing the documents
they wanted to compel production of and the reasons they
thought production was warranted. The documents relate to
when Plaintiffs may have discovered that Defendants were
improperly using and disclosing confidential data supplied by
Plaintiffs and protected by a non-disclosure agreement.
Plaintiffs responded on Halloween. Another discovery dispute,
which is not relevant to this matter, also arose in early
November. Judge Williams scheduled a telephonic conference
Williams held a telephonic conference with counsel on
November 14, 2018. Near the end of the conference, Judge
Williams and the parties turned to the privilege issues now
before this Court. The transcript reveals the following
THE COURT: All right. Any other disputes? Any other disputes
that I need to address? You have two minutes, then I've
got to attend to other matters.
MR. CALABRO: Your Honor, we __ this is Mr. Calabro for Gibbs
& Cox. We have a dispute concerning the plaintiff
[s'] waiver of privilege, and that's our October 29th
THE COURT: All right. So let me tell you what my answer is
because I've read the submissions, and I don't find a
waiver. I think the Third __ the Third Circuit is pretty
clear on what constitutes a waiver. And on this record, by
these submissions, I do not believe the waiver has occurred.
MR. CALABRO: Thank you, Your Honor.
THE COURT: You're welcome. All right.
MR. CALABRO: Your Honor, can we get a written __
THE COURT: You all have a good day. Huh? I'm sorry.
MR. CALABRO: I'm sorry, Your Honor. This is Mr. Calabro
again. Can we get a written ruling on that?
THE COURT: Sure.
MR. CALABRO: Thank you.
THE COURT: Order, see transcript. No, I'm kidding. I will
__ I will produce something. I will produce - it'll be
short, but I will give you something written.
MR. CALABRO: Thank you, Your Honor.
THE COURT: You're welcome. Have a good day.
NIDENTIFIED COUNSEL: Thank you, Your Honor.
(Defs.' Rule 72 Mot., Ex. I 22:16-23:16.)
Williams issued the order appealed on November 15, 2018 (the
"Order") . In the Order Judge Williams expanded
upon her oral ruling the day before. Specifically, Judge
Williams stated she had reviewed the parties'
submissions, found no implicit waiver, and denied
Defendants' request to order production of the privileged
communications at-issue. Although the Court will discuss the
details of this Order as relevant infra, the Court
notes that Judge Williams held that Plaintiffs'
invocation of the discovery rule did not rely upon advice of
counsel. On November 28, 2018, Defendants filed their Rule 72
Motion. The Rule 72 Motion has been fully briefed.
review of the briefing, the Court determined that the parties
appeared to dispute which states' substantive law should
be the basis for the Court's ruling on the privilege
issues. Unfortunately, the Court found that the parties had
not adequately briefed the issue. On June 25, 2019, the Court
ordered the parties to submit letter briefs solely on this
issue. The parties have done so. Thus, the Rule 72 Motion is
ripe for adjudication. The Court also notes that the parties
filed joint motions to seal which will also be decided,