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Idexx Laboratories, Inc. v. Triple R Veterinary, PLLC

United States District Court, D. Maine

August 2, 2016

IDEXX LABORATORIES, INC., et al., Plaintiffs,


          George Z. Singal United States District Judge

         This matter is set for a bench trial, to commence on August 23, 2016, on the damages owed by Defendant Triple R Veterinary in connection with its stipulated liability under the IDEXX Reference Laboratory Preferred Customer Agreement with a start date of January 1, 2012 (the “Parent Agreement”). The parties have filed a variety of pretrial motions. Specifically, before the Court are the following motions: (1) Defendant’s Motion to Retain Confidentiality Designations (ECF No. 20); (2) Defendant’s Motion in Limine Regarding Measure of Plaintiffs’ Damages (ECF No. 50); and (3) Plaintiffs’ Motion in Limine to Exclude Extrinsic Evidence (ECF No. 51). For reasons briefly explained herein, the Court DENIES each of these three Motions (ECF Nos. 20, 50 & 51). All of these denials are made without prejudice to either party renewing their objections at trial as particular evidence is presented. Additionally, as explained below, to the extent that the motions raise issues that the Court believes go to the heart of the parties’ remaining dispute, the Court concludes those issues are not amenable to resolution via motions in limine and can only be resolved on the more fully developed post-trial record.[1]

         1. Defendant’s Motion to Retain Confidentiality Designations (ECF No. 20)

         Via this Motion, Defendant Triple R Veterinary, PLLC (“Triple R”) seeks to retain the designation of “Confidential-Attorneys’ Eyes Only” that it applied to 243 pages of its document production (TRV00001-TRV00243) that relate to its ongoing business relationship with Antech Diagnostics (hereinafter, the “Antech documents”).

         After taking the Motion to Retain Confidentiality Designations under advisement, the Court asked for the Antech documents to be submitted in camera for review. Having now reviewed the documents as well as the written submissions of the parties in connection with the Motion to Retain Confidentiality Designations, the Court DENIES the Motion, finding that Triple R waived the designation and that, in any event, it has not shown good cause for its ongoing categorical designation of the Antech documents as “Attorneys’ Eyes Only.”

         The Consent Confidentiality Order (ECF No. 18) entered in this case allows for the production of materials with the designation “Confidential-Attorneys’ Eyes Only.” It also provides that if opposing counsel objects to any designations, it may serve an objection on the designating party within thirty days. (Confidentiality Order ¶ 8(a).) The Confidentiality Order then provides for a fifteen day period to meet and confer. If an agreement is not reached that resolves the objection, the Order clearly requires the designating party to file a motion to retain its designation within thirty days of service of the objection and “show good cause for the . . . designation.” (Confidentiality Order ¶ 8(c).) “The failure to file the motion waives the . . . CONFIDENTIAL-ATTORNEYS’ EYES ONLY designation.” (Id.)

         Here, IDEXX objected to the designation of the Antech documents on February 18, 2016. By all accounts, the parties conferred, but no resolution was reached. Both sides agree that the thirty-day deadline for Triple R to file its motion passed on March 21, 2016. Triple R then filed the pending Motion ten days later on March 31, 2016. Thus, under the plain and clear terms of the Confidentiality Order, the designation was waived.

         Assuming the Court could somehow excuse this delay, the Court nonetheless concludes that the Motion does not categorically provide good cause for the continuing designation. First, Triple R maintains that the documents are irrelevant to the issues remaining for trial. On this point, the Court disagrees. For reasons more fully explained in the Court’s ruling on Defendant’s Motion in Limine Regarding Measure of Plaintiffs’ Damages (ECF No. 50), the Court does believe that at least some of the Antech documents may be relevant under IDEXX’s theory of damages, and the Court intends to allow IDEXX to present evidence in support of that theory at trial. As explained in Plaintiffs’ June 6, 2016 Proffer, the Court is also satisfied that IDEXX may be able to establish that some of the Antech documents are relevant to the credibility of certain witnesses Triple R has listed as trial witnesses.

         Second, Triple R maintains that any lifting of its confidentiality designation on the Antech documents will give IDEXX “an unfair competitive advantage, ” given that IDEXX and Antech are “the dominant players” in a “narrow industry.” (Trautwein Decl. (ECF No 20-1) ¶ 11.) While even IDEXX acknowledges that Antech’s pricing information (a subset of the information contained within the Antech documents) “potentially raises competitive concerns, ” the Court is satisfied based on the exhibits submitted by Plaintiffs that similar information related to Antech pricing has been publicly disclosed in the past. (Pls. Response (ECF No. 22) at 6-7 & Exs. A & B.) Thus, Triple R simply has not met its burden of establishing good cause on a timely basis to support the categorical sealing of the Antech documents.

         To the extent it aids the parties in preparation for the upcoming public trial, the parties are advised that the Court anticipates that each and every exhibit received at trial will be publicly available. Upon a showing of good cause, the Court may consider allowing the submission of a redacted document as the exhibit if the redacted version will still allow the Court to consider and decide the damages issues being presented. However, the parties should not anticipate that the Court will allow the sealing of exhibits simply because they were produced with a confidentiality designation.[2] (See Confidentiality Order ¶¶ 9 & 10.) Similarly, the parties should not anticipate that the Court will be able to publicly explain its post-trial decision to award damages in a certain amount without any reference to the numbers relevant to the calculation of the damages.

         2. Defendant’s Motion in Limine Regarding Measure of Plaintiffs’ Damages (ECF No. 50)

         Defendant seeks a pretrial ruling that the measure of IDEXX’s lost profits as a result of Triple R’s breach must be calculated by using the enumerated minimum qualifying annual purchase levels in the contract[3] to determine the anticipated lab revenue for the term of the contract and then subtracting the revenue IDEXX actually received from Triple R for reference lab services and costs saved due to the breach.[4] IDEXX objects and maintains that it can establish at trial that its lost profits from Triple R’s breach of a multi-year agreement exceed the enumerated minimum qualifying annual purchase levels.

         Given the undisputed application of Maine law to the breach of contract at issue here, the purpose of the damage award is to “‘place the plaintiff in the same position as that enjoyed had there been no breach.’” Williams v. Ubaldo, 670 A.2d 913, 917 (Me. 1996) (quoting Marchesseault v. Jackson, 611 A.2d 95, 98 (Me. 1992)). Thus, Maine law aligns with the Restatement in calling for breach of contract damages to be based on “the injured party’s ‘expectation interest, ’ defined as its ‘interest in having the benefit of [its] bargain by being put in as good a position as [it] would have been in had the contract been performed . . . .’” Deering Ice Cream Corp. v. Colombo, Inc., 598 A.2d 454, 456-57 (Me. 1991) (quoting Restatement (Second) of Contracts § 344 (1981)). To arrive at the “expectation interest, ” it is anticipated that the damage award will reflect deductions for “any cost or other loss that [the injured party] is able to avoid by not having to perform its side of the contract, as well as . . . any net benefit that the injured party could reasonably realize as a result of the termination of the contract.” Id. (citing Restatement (Second) of Contracts §§ 347, 350).

         Given the exclusivity terms of the breached contract, IDEXX is entitled to present evidence of how much it would have actually earned had Triple R complied with the exclusivity term, including the portion of that term that required Triple R to transition “practices acquired after the Start Date.” In its Response to this Motion (ECF No. 44), IDEXX represented that seven such additional practices were added. (See id. at 4 n. 2.) Notably, these later acquired practices would not have been included in setting the enumerated ...

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