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Knight Capital Partners Corp. v. Henkel AG & Co.

United States District Court for the Eastern District of Michigan, Southern Division

November 30, 2017, Decided; November 30, 2017, Filed

Case Number 16-12022

Opinion

 [*683]  OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL DISCOVERY, GRANTING IN PART AND DENYING IN PART MOTIONS BY DEFENDANT AND NON-PARTY HENKEL CORPORATION FOR PROTECTIVE ORDERS, DENYING HENKEL CORPORATION'S MOTION TO QUASH SUBPOENA, AND GRANTING RELIEF FROM SCHEDULING ORDER

Discovery disputes bring this case back before the Court. Plaintiff Knight Capital Partners sued defendant Henkel KGaA ("Henkel Global") for tortious interference with a business expectancy and breach of a non-disclosure agreement after Henkel Global allegedly scuttled a three-way deal KCP was brokering among itself, Henkel Corporation (the defendant's American subsidiary), and AI Sealing, LLC (AIS), a technology company that held patents on products useful [**2]  in the oil production business. KCP served interrogatories and document requests on the defendant and subpoenaed documents from its American Subsidiary (Henkel US). The defendant and Henkel US refused to respond to the requests unless KCP agreed to a protective order that contained terms KCP deemed onerous and unjustified. KCP has moved to compel production. Henkel US moved to quash the subpoena, and both Henkel companies seek a protective order. Central to their arguments is the German Federal Data Protection Act, a foreign discovery blocking statute, which the defendant and Henkel US insist prevents them from turning over much of the information the plaintiff seeks.

 [*684]  After reviewing the materials submitted — including the affidavit from Joachim Bornkamm, a former German jurist and the defendant's foreign law expert — the Court is not convinced that the reach of the German Federal Data Protection Act is as vast as the defendant and Henkel US claim, or that it prohibits the discovery the plaintiff seeks. With one exception, the terms of the protective order sought by the defendant and Henkel US are overly restrictive and the Court will not impose them. The plaintiff's motions to compel [**3]  responses to first written discovery requests to defendant and to compel compliance with subpoena to Henkel US will be granted. The defendant's amended motion for entry of protective order and non-party Henkel US's motion to quash the subpoena or for protective order will be granted in part and denied in part. The Court will adjust the case management deadlines to allow for the discovery.

The facts of the case are discussed at length in the Court's opinion and order denying the defendant's motion to dismiss. See dkt. #40 at 2-8. The basic facts alleged are that KCP became aware of technology patented by AIS in Texas that could be used to clean dirty equipment at refineries and oil rigs. AIS granted KCP a license for a limited period to develop and sell that technology. KCP approached AIS to broker a partnership that would include Henkel US, which would have marketed the patented products under the Henkel brand. As part of the negotiations, Henkel US executed a nondisclosure agreement that governed the way the parties would handle confidential information. KCP alleges that defendant Henkel Global induced Henklel US to subvert the negotiations so that KCP's license from AIS would expire, [**4]  and the defendant could come to terms directly with AIS and cut KCP out of the venture. KCP also alleges that the nondisclosure agreement was violated along the way.

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290 F. Supp. 3d 681 *; 2017 U.S. Dist. LEXIS 196713 **; 99 Fed. R. Serv. 3d (Callaghan) 692; 2017 WL 5898455

KNIGHT CAPITAL PARTNERS CORP., Plaintiff, v. HENKEL AG & COMPANY, KGaA, Defendant.

Prior History: Knight Capital Partners Corp. v. Henkel AG & Co., KGaA, 257 F. Supp. 3d 853, 2017 U.S. Dist. LEXIS 97203 ( E.D. Mich., June 23, 2017)

CORE TERMS

discovery, documents, protective order, disclosure, discovery request, requests, seal, subpoena, communications, confidential, courts, foreign law, designation, technology, parties, German Federal Data Protection Act, compliance, entities, request information, plain language, authorities, terms, weigh, compel disclosure, legal claim, negotiations, automatic, domestic, privacy, records