United States Specialty Sports Assn., Inc. v. Majni , 2022 Ohio 3035 ( 2022 )

[Cite as United States Specialty Sports Assn., Inc. v. Majni, 2022-Ohio-3035.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
UNITED STATES SPECIALTY SPORTS :
ASSOCIATION, INC.,
Plaintiff-Appellee, :
No. 110830
v. :
CLIFFORD MAJNI, ET AL., :
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, DISMISSED IN PART,
AND REMANDED
RELEASED AND JOURNALIZED: September 1, 2022
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-19-925953
Appearances:
REMINGER CO., L.P.A., Brian D. Sullivan, and Brianna
Marie Prislipsky, for appellee.
Gertsburg Licata Co., LPA, and Stewart D. Roll, for
appellants.
LISA B. FORBES, P.J.:
Appellants, Clifford Majni (“Majni”), One Nation Athletics, LLC, One
Nation Sports, LLC, and One Nation Slow Pitch, LLC (Majni and the One Nation
entities collectively referred to as “One Nation”) and Virteom, LLC (“Virteom”)
appeal the trial court’s orders granting appellee United States Specialty Sports
Association, Inc.’s (“USSSA”) motion to compel and denying One Nation’s motion
to compel. After reviewing the facts of the case and pertinent law, we affirm in part,
dismiss in part, and remand to the trial court for further proceedings consistent with
this opinion.
I. Facts and Procedural History
USSSA sued One Nation alleging that “Majni (a) improperly
competed against USSSA in violation of his non-compete agreement, and (b)
misappropriated and misused confidential and personal information of USSSA in
violation of his confidentiality agreement,” among other things. USSSA alleged that
it acquired Global Sports League Softball (“GSL”) in February 2014, of which Majni
was the chief executive officer. Following the acquisition, Majni served as the Senior
Vice President of GSL, a wholly owned subsidiary of USSSA, where he had “access
to USSSA records, including but not limited to, team and vendor lists, participant
information and registrations, billing information and data.” According to USSSA,
Majni created One Nation in July 2018 to compete with USSSA. USSSA requested
injunctive relief and asserted claims for breach of contract, misappropriation of
trade secrets, conversion, unfair competition, tortious interference with business
relationship, tortious interference with contract, and unjust enrichment.
USSSA served a subpoena duces tecum, pursuant to Civ.R. 45, on
nonparty Virteom on December 20, 2019. Virteom was a vendor hired by One
Nation to develop a new website and database. The subpoena requested documents
related to the relationship between One Nation and Virteom and “any and all
content, created for on behalf of Clifford Majni, Global Sports League Nation, Inc.,
One Nation Sports, LLC, One Nation Slow Pitch, LLC or One Nation Athletics, LLC
including all drafts, beta-tested webpages or electronic platforms or databases,”
among other things.
USSSA also propounded interrogatories and document requests
under Civ.R. 33 and 34 to One Nation on February 14, 2020, seeking documents and
information related to the relationship between One Nation and Virteom and to the
website and database created for One Nation by Virteom.
A. The Protective Order
The trial court adopted the parties’ Stipulated Protective Order, which
states in pertinent part:1
1. Scope. All documents produced in the course of discovery, including
initial disclosures, all responses to discovery request, all deposition
testimony and exhibits, other materials which may be subject to
restrictions on disclosure for good cause and information derived
directly therefrom (hereinafter collectively “documents”) * * * shall be
subject to this Order concerning confidential information as set forth
below.
2. Form and Timing of Designation. A Party may designate documents
as confidential and restricted in disclosure under this Order by placing
or affixing the words “CONFIDENTIAL – SUBJECT TO PROTECTIVE
ORDER” on the document * * *. When electronically stored
information is produced which cannot itself be marked with the
designation CONFIDENTIAL, the physical media on which such
electronically stored information is produced shall be marked with the
applicable designation. The party receiving such electronically stored
information shall then be responsible for labeling any copies that it
1In its appellate brief, One Nation claims that it did not consent to the Stipulated
Protective Order. However, that issue is not presently before this court for review.
creates thereof, whether electronic or paper, with the applicable
designation. * * *.
3. Documents Which May be Designated CONFIDENTIAL —
SUBJECT TO PROTECTIVE ORDER. Any party may designate
documents as CONFIDENTIAL — SUBJECT TO PROTECTIVE
ORDER upon making a good faith determination that the documents
contain information protected from disclosure by statute or that should
be protected from disclosure as * * * trade secrets, * * * or such other
sensitive commercial information that is not publicly available * * *
shall be subject to this Order concerning confidential information as set
forth below. * * *.
***
5. Protection of Confidential Material.
(a) General Protections. Documents designated CONFIDENTIAL —
SUBJECT TO PROTECTIVE ORDER under this order shall not be used
or disclosed by the parties, counsel for the parties or any other persons
identified in ¶ 5(b) for any purpose whatsoever other than to prepare
for and to conduct discovery and trial in this action * * *; and
(b) Limited Third-Party Disclosures. The parties and counsel for the
parties shall not disclose or permit the disclosure of any
CONFIDENTIAL — SUBJECT TO PROTECTIVE ORDER documents
to any third person or entity except as set forth in subparagraphs (1)-
(5). Subject to these requirements, the following categories of persons
may be allowed to review documents that have been designated C-
SUBJECT TO PROTECTIVE ORDER.
***
(2) Parties. Parties and employees of a party to this Order.
(Emphasis omitted.)
A footnote to paragraph (5)(b)(2) provides for additional protection:
If the CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER
documents contain highly sensitive trade secrets or other highly
sensitive competitive or confidential information and disclosure to
another party would result in demonstrable harm to the disclosing
party, then the parties may stipulate or move for the establishment of
an additional category of protection that prohibits disclosure of such
documents or information to category (2) or that limits disclosure only
to specifically designated in-house counsel or party representative(s)
whose assistance is reasonably necessary to the conduct of the litigation
and who agrees to be bound by the terms of the order.
B. Discovery Disputes
Discovery disputes ensued. On April 20, 2021, the trial court sua
sponte ordered One Nation to produce its “‘website software or content’” to
opposing counsel “in accordance with Footnote 1 to paragraph 5(b)(2)” of the
protective order. The trial court found that pursuant to section three of the
protective order, One Nation’s “‘website software or content’ may be designated as
confidential and, under paragraph 5, counsel and the parties are bound to not
disclose such data or information or use ‘for any purpose whatsoever other than to
prepare for and to conduct discovery and trial in this action.’”
Dissatisfied with One Nation’s responses to its discovery requests, on
July 2, 2021, USSSA filed a motion to compel One Nation to respond “to its written
discovery and to allow access to [One Nation’s] online database.”
USSSA asked the court, on August 6, 2020, to compel Virteom to
respond to the Virteom subpoena.
On August 19, 2021, the trial court granted USSSA’s motion to compel
discovery responses from One Nation. The trial court ordered One Nation “to
supplement their responses to [USSSA’s] requested discovery and provide [USSSA]
with access to the One Nation database pursuant to the protective order * * *.” On
the same day, the trial court issued a separate journal entry granting USSSA’s
motion to compel Virteom to respond to the Virteom subpoena.
One Nation filed a motion “to compel the deposition of the person in
charge of [USSSA’s] Information Technology (“IT”) Department” on September 3,
2021. The trial court denied One Nation’s motion to compel on September 15, 2021.
One Nation and Virteom appealed the August 19, 2021 and
September 15, 2021 journal entries.
II. Law and Analysis
One Nation and Virteom raise the following two assignments of error:
The trial court erred in the journal entries journalized on August 19,
2021, granting Plaintiff/Appellee [USSSA’s] motion to compel
production and access to Defendants’ and non-party Virteom, LLC’s
proprietary database, content, and other trade secrets * * *.
The trial court erred in the journal entry journalized September 15,
2021, denying Defendants’ motion to compel the deposition of the head
of USSSA’s IT Department, and requiring production of the described
database, content and other trade secrets on Sunday, September 19,
2021 * * *.
We review a trial court’s decision to grant or deny a motion to compel
for an abuse of discretion. Wolnik v. Matthew J. Messina, DDS, Inc., 8th Dist.
Cuyahoga No. 88139, 2007-Ohio-1446, ¶ 15. The term abuse of discretion “implies
that the court’s attitude is unreasonable, arbitrary, or unconscionable.” Blakemore
v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
A. The August 19 Journal Entries and the First Assignment of
Error
1. The August 19 Journal Entries are Final Appealable Orders
At the outset, we note that USSSA argues on appeal that the August
19 journal entries ordering the production of One Nation’s database are not final
appealable orders because the protective order in place provides adequate
safeguards. This argument is not well taken.
An order compelling the production of privileged information is final
and appealable under R.C. 2505.02(B)(4). See Burnham v. Cleveland Clinic, 151
Ohio St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536, ¶ 30. This court has recognized
that this rule extends to orders compelling production of allegedly trade secret
information. Harris v. Belvoir Energy, Inc., 8th Dist. Cuyahoga No. 103460, 2017-
Ohio-2851, ¶ 10; See also Gibson-Myers & Assocs. v. Pearce, 9th Dist. Summit No.
19358, 1999 Ohio App. LEXIS 5010, 7 (Oct. 27, 1999) (finding “any order compelling
the production of documents which constitute trade secrets is a final appealable
order under R.C. 2505.02(B)(4).”); Armstrong v. Marusic, 11th Dist. Lake No.
2001-L-232, 2004-Ohio-2594, ¶ 15 (expressly finding a final appealable order when
the trial court ordered the production of trade secret information where there was a
protective order in place).
In support of its proposition that the August 19 orders are not final
and appealable because “adequate safeguards” are afforded by the protective order,
USSSA relies on Dispatch Printing Co. v. Recovery L.P., 166 Ohio App.3d 118, 2006-
Ohio-1347, 849 N.E.2d 297 (10th Dist.). We find that Dispatch is not dispositive of
the case presently before this court.
As explained in this court’s October 19, 2021 journal entry denying
USSSA’s motion to dismiss this appeal, the question of whether the protective “order
provides sufficient protective protocols to safeguard the appellants’ confidential
information” goes to the merits of the appeal. The adequacy of the protections
afforded were not in question in Dispatch. Here, One Nation and Virteom dispute
that the protective order is adequate, arguing the materials they have been
compelled to produce are not protected by it. See Organ Cole, L.L.P. v. Andrew,
10th Dist. Franklin No. 20AP-65, 2021-Ohio-924, ¶ 14 (finding that the appellate
court lacked “jurisdiction to review the substance of the trial court’s order beyond
the ‘adequate safeguards’ it created”).
Under these circumstances, we find the trial court’s August 19 orders
to be final and appealable.
2. The trial court did not abuse its discretion when it ordered
production pursuant to the protective order
Turning to the first assignment of error, One Nation and Virteom
argue that “[t]he orders compelling production of [their] proprietary software,
content and their other trade secrets are not protected by the ‘Stipulated’ Protective
Order * * *.” Importantly, the trial court’s August 19 orders specifically extend the
protective order to the productions ordered by the court. The trial court required
One Nation to provide access to the “database pursuant to the protective order
entered in this matter,” and compelled Virteom “to respond to [USSSA’s] subpoena
* * * pursuant to the protective order * * *.”
One Nation argues that the protective order does not adequately
protect its proprietary software, content, and other trade secrets because the
protective order only applies to documents and therefore will not protect its
software. We disagree.
The protective order applies to more than paper documents. In the
protective order, the defined term “documents” includes “all responses to discovery
requests * * * [and] other materials which may be subject to restrictions on
disclosure for good cause * * *.” Materials produced in response to a Civ.R. 34
request for production, like the materials One Nation was ordered to produce, are
“responses to discovery.” See Civ.R. 34 (Subject to Civ.R. 26(B), requests for
production may properly include requests “to inspect and copy any designated
documents or electronically stored information including * * * data compilations
stored in any medium from which information can be obtained.”).
Further, the protective order specifically contemplates the production
of electronic, nonphysical documents:
When electronically stored information is produced which cannot itself
be marked with the designation CONFIDENTIAL, the physical media
on which such electronically stored information is produced shall be
marked with the applicable designation. The party receiving such
electronically stored information shall then be responsible for labeling
any copies that it creates thereof, whether electronic or paper, with the
applicable designation.
The trial court specifically ordered that the compelled production was
protected by the protective order entered in the case. Under the express terms of
that protective order, One Nation may designate its discovery responses and the
materials it produces as “CONFIDENTIAL – SUBJECT TO PROTECTIVE ORDER,”
limiting their use and disclosure and requiring their return at the conclusion of the
litigation.
Finally, in addition to the August 19 order, in its April 20, 2021
journal entry, the trial court extended even greater protection to One Nation when
it ordered One Nation to produce its “‘website software or content’” to opposing
counsel “in accordance with Footnote 1 to paragraph 5(b)(2)” of the Stipulated
Protective Order. The Protective order, at footnote 1 to paragraph 5(b)(2), allows
for additional protection of certain highly sensitive documents by restricting their
access to “specifically designated in-house counsel or party representative(s) whose
assistance is reasonably necessary to the conduct of the litigation and who agree to
be bound by the terms of the order.”
Virteom argues that because it is not a party to the protective order,
the trial court erred by requiring it to produce “its software and trade secrets.”
Again, we disagree.
As already recognized, in its August 19 order the trial court expressly
directed that Virteom’s subpoena responses were to be made “pursuant to the
protective order.” The trial court thus extended the protective order to include
Virteom’s production, limiting the use and dissemination of Virteom’s materials,
and mandating their return at the conclusion of the litigation.
Additionally, USSSA issued a subpoena duces tecum to Virteom
pursuant to Civ.R. 45 seeking access to its database and software, among other
things. “[A] subpoena duces tecum issued to a nonparty pursuant to Civ.R. 45 is
subject to the scope of discovery as defined by Civ.R. 26(B).” Gangale v. Coyne,
2022-Ohio-196, 183 N.E.3d 1245, ¶ 25 (8th Dist.) That is, materials produced by
Virteom in response to the subpoena issued by USSSA will fall within the definition
of “documents” as that term is used in the protective order. Pursuant to footnote 1
to paragraph 5(b)(2), Virteom or One Nation may seek additional protection under
the protective order for highly sensitive information by restricting their access to
“specifically designated in-house counsel or party representative(s) whose
assistance is reasonably necessary to the conduct of the litigation and who agree to
be bound by the terms of the order,” if the parties stipulate to as much.
Moreover, nothing in the protective order prohibits One Nation, who
is an original party to the protective order, from designating the Virteom production
as “CONFIDENTIAL - SUBJECT TO PROTECTIVE ORDER.” As part of that
protective order, USSSA agreed that any documents “produced in the course of
discovery” marked by a party as “CONFIDENTIAL — SUBJECT TO PROTECTIVE
ORDER” “shall not be used or disclosed by the parties * * * for any purpose
whatsoever other than to prepare for and to conduct discovery and trial in this action
* * *.”
Under these circumstances, we find no merit to One Nation and
Virteom’s arguments that the trial court abused its discretion by compelling
production. See Lima Mem. Hosp. v. Almudallal, 2016-Ohio-5177, 69 N.E.3d 204,
¶ 67 (3d Dist.) (finding the trial court did not abuse its discretion when it granted a
motion to compel the production of trade secrets where there was a protective order
in place that adequately protected the trade secret information.); Compare Majestic
Steel Serv. v. DiSabato, 8th Dist. Cuyahoga No. 76521, 1999 Ohio App. LEXIS 6047,
6 (Dec. 16, 1999) (finding the trial court abused its discretion when it granted a
motion to compel with no protective order in place and ordered a nonparty to
produce “trade secrets to [the appellee] without affording [the nonparty appellant]
any protection”).
Finally, in their first assignment of error, One Nation and Virteom (1)
note that the trial court did not require USSSA to identify specifically what it alleged
was stolen by One Nation, and (2) invite this court to adopt a procedure rejected by
the trial court “without explanation” that was described in a Texas case decided in
1974 for conducting an in camera examination to determine whether any “likely
theft” of trade secrets has occurred. Notably, they do not argue that the trial court
committed an abuse of discretion in either regard. In support of their observation
and request for a new procedure, One Nation and Virteom cite an article and an
assortment of cases from other jurisdictions; they cite no Ohio law. Nothing in their
concluding observations alters our conclusion that the trial court did not abuse its
discretion in granting USSSA’s motion to compel.
One Nation and Virteom’s first assignment of error is overruled.
B. The September 15 Journal Entry and the Second Assignment of
Error
In the second assignment of error, One Nation argues that the trial
court erred when it denied “[One Nation’s] motion to compel the deposition of the
head of USSSA’s IT Department, and require[ed] production of the described
database, content and other trade secrets[.]”
To the extent that One Nation argues the trial court erred in requiring
the production of its database, that portion of its argument has been disposed of
with the first assignment of error.
Regarding the argument that the trial court erred in denying One
Nation’s motion to compel the deposition of USSSA’s IT director, we find that we do
not have jurisdiction to make a ruling because the order in question is not final and
appealable.
R.C. 2505.02 defines a final appealable order in pertinent part as:
(B) An order is a final order that may be reviewed, affirmed, modified,
or reversed, with or without retrial, when it is one of the following:
(1) An order that affects a substantial right in an action that in effect
determines the action and prevents a judgment;
(2) An order that affects a substantial right made in a special
proceeding or upon a summary application in an action after judgment;
(3) An order that vacates or sets aside a judgment or grants a new trial;
(4) An order that grants or denies a provisional remedy and to which
both of the following apply:
(a) The order in effect determines the action with respect to the
provisional remedy and prevents a judgment in the action in favor of
the appealing party with respect to the provisional remedy.
(b) The appealing party would not be afforded a meaningful or effective
remedy by an appeal following final judgment as to all proceedings,
issues, claims, and parties in the action
An interlocutory order denying a motion to compel discovery is a
provisional remedy to which subsection (B)(4) applies. But, the order denying One
Nation’s motion to compel did not determine the action nor did it deny the appealing
party a meaningful or effective remedy. It is, therefore, not a final appealable order.
See Hoag v. Ent. Holdings, 2021-Ohio-506, 168 N.E.3d 142, ¶ 42 (8th Dist.). None
of the other provisions defining a final appealable order even arguably apply to the
trial court’s denial of One Nation’s motion to compel.
Because the journal entry that is the subject of One Nation’s second
assignment of error is not a final and appealable order, we do not have jurisdiction
to consider it and, therefore, we dismiss One Nation’s second assignment of error.
Judgment is affirmed in part, dismissed in part, and remanded to the
trial court for further proceedings consistent with this opinion.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
________________________________
LISA B. FORBES, PRESIDING JUDGE
EMANUELLA D. GROVES, J., and
CORNELIUS J. O’SULLIVAN, JR., J., CONCUR