Weighing Proportionality and Necessity, Court Denies Request for GM Simulation ESI Based Upon Trade Secret Concern

24 Jan 2018

Follow our blog for regular updates recent casesIn Pertile v. General Motors, LLC, No. 1:15-cv-00518, 2016 WL 1059450, (D. Colo. Mar. 17, 2016), plaintiffs allege that Daniel Pertile was catastrophically injured during a rollover accident that occurred on February 25, 2013, in which Daniel was the front seat passenger of a Chevrolet Silverado 2500 HD crew cab truck.  On July 6, 2015, the court entered a Protective Order, and, to facilitate discovery,  also entered an Electronically Stored Information Protocol (“ESI Protocol”).

The ESI Protocol referenced the Parties’ disagreement as to whether GM would be required to produce ESI related to its finite element analysis. Finite element analysis (“FEA”) is a computer modeling technology used to create mathematical simulation of a three dimensional, virtual representation of a vehicle, component or system subjected to prescribed load conditions. It is used to simulate real-world behavior of physical objects.

The Parties proceeded with discovery, including the exchange of documents and ESI, through Initial Disclosures. GM produced ESI related to the design of the Chevrolet Silverado at issue, in the form of Computer Aided Design (“CAD”) files. Plaintiffs’ requests included production of FEA in the original native form, all finite element models depicting the roof and pillar structures of the subject vehicle design, including but not limited to inputs, outputs, pre and post processing, and mesh files. GM refused to produce its trade-secret FEA Models, on the grounds that the discovery sought by Plaintiffs was not reasonable or necessary, particularly in light of other discovery provided by GM.

The Court stated that as a threshold issue it must examine proportionality and necessity, and that the argument that production ‘might yield helpful information’ is not the applicable standard.

With regard to an examination of proportionality, under FRCP Rule 26, the Court must look at other factors to determine whether the requested discovery is proportional to Plaintiffs’ needs. These factors include the importance of the requested information to the issues presented by the case, the relative access to the information by the Parties, and whether the burden or expense of the discovery outweighed the benefit. Further, while there is no absolute privilege regarding trade secrets, if GM is able to show harm from disclosure of the FEA data, then the burden shifts back to Plaintiffs to establish that the FEA Models are not only relevant, but necessary, to prove their case.

GM argued that it may suffer harm if its trade secrets as to the FEA models are disclosed. GM stated that it carefully limits access to its technical trade secrets both internally and externally, that there is no satisfactory solution if the trade secrets are leaked, and that there is no way to monitor compliance with the Protective Order to ensure the trade secrets are not disclosed.

In weighing the competing factors, the Court found that GM met its burden to show that disclosure of the FEA Models “might” be harmful. The Court found that it was undisputed that GM dedicated considerable resources to developing its FEA Models, and that the FEA Models themselves are considered trade secrets. The Court concluded that the potential disclosure of GM’s FEA Models, even under the Protective Order, might be harmful.  This finding shifted the burden back to Plaintiffs to establish that the production of the ESI regarding the Models is relevant and necessary.

The court next reviewed the relevance and necessity of the production of the FEA model data. Plaintiffs urged the Court to compel discovery, on the theory that the FEA Models were important to understanding what the GM engineers knew when they were running computer simulations. The Court and the parties acknowledged that the FEA Models could yield information relevant to the action. The Court found, however, that the FEA Models themselves do not necessarily tell Plaintiffs what GM actually knew about the design of the roof structure. The Court found that the input data instead reflected a body of information from which GM engineers drew to run computer simulations, but did not reflect the final design of the vehicle at issue, or even necessarily an interim design.

Given these findings, the Court ruled that Plaintiffs had provided no factual basis to argue that the CAD drawings or other design documents which had been produced were insufficient, or that that a need for production of the FEA models existed. Without factual basis established by Plaintiffs that the production to date was inadequate, Plaintiff’s attempt to compel production of FEA models was not proportional or necessary. The Court denied the Motion to Compel the data relative to the FEA Models.