HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 084 - City Reply Re Mot Protective OrderIN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.: 21-cv-02063-DDD-NYW
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
PLAINTIFF CITY OF FORT COLLINS’ REPLY IN SUPPORT OF MOTION FOR
PROTECTIVE ORDER TO REQUIRE DEFENDANTS’ COMPLIANCE WITH THE
OCTOBER 14, 2021 STIPULATED PROTECTIVE ORDER [DKT. 64]
INTRODUCTION
Open’s Response (Dkt. 74) misses the point of the City’s Motion (Dkt. 64).
First, Open fails to address the question this Court required the Parties to address when
Open previewed the issue at the June 16th hearing: Why the documents Open seeks through the
CORA request should not be produced via discovery in this action. That is because they have
been produced.
Second, the City’s Motion is based on Open’s use of the Produced Protected Material as
the basis of the CORA request in violation of the Stipulated Protective Order (the “SPO”) that was
already entered in this case and binds the parties. The Motion does not seek an “injunction” on
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 1 of 11
the CORA request as Open alleges. Open’s mischaracterization of the Motion does not defeat its
violation of the SPO and Open and its counsel must be required to comply with the same.
Third, there are no documents Open “obtained long before this litigation” as Open’s
counsel repeatedly argues. Rather, as evidenced by the declarations and documents, Open
downloaded and “obtained” the documents at issue five days after Open received a copy of the
Complaint and actual notice of the litigation. Open acknowledged, at the time it downloaded the
documents, that it had no authority or credentials to access any of the City’s databases per the
City’s termination of Master Professional Services Agreement (“MPSA”). July 7, 2021 Email,
Ex. 4 [Dkt. 64-4] at 2-3. Nonetheless, Open improperly accessed, downloaded, and for the first
time obtained possession of the City’s confidential materials. Open circumvented the discovery
process and cannot seek a run-around the SPO based on this unprotected activity.
Fourth, regardless of the above, Open did use documents produced by both Open and the
City to draft and make the CORA request for the very same documents. Open tries to make a
distinction between documents protected as confidential under the MPSA as falling outside the
SPO, but the SPO provides special protection to all confidential information.
Finally, Open for the first time discloses what it is really after—to be able to disclose and
use Protected Material with its “prospective business partners to show that the City’s derogatory
claims against Open are spurious.” That seeks to circumvent the very reason the Parties sought
and entered into the SPO—to provide both Parties’ confidential information and documents
“special protection” from public disclosure and use other than in this litigation.
Not only did Open violate the SPO by using Protected Material as the basis of its CORA
request but it is now indicating that it is ready to continue to violate the SPO by disclosing and
using Protected Material outside of this litigation with “prospective partners.” This Court should
grant the City’s Motion and Order that Open and its counsel comply with the SPO.
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 2 of 11
3
ARGUMENT
A. Whether Open Could Make a Proper CORA Request is Not at Issue--Open Violated
the SPO by Using the Produced Protected Material as the Basis of Its CORA Request.
Open’s action at issue is the use of the Produced Protected Material outside of this litigation
and for a purpose other than prosecuting and defending this litigation, in violation of the SPO.
Specifically, Open and its counsel used their knowledge of the Produced Protected Material and
the information contained therein to submit a CORA request in an attempt to obtain “public
versions” of the same protected documents. All this Court needs to review is the first conferral
from Open in which it threatened to use 17 documents produced in this litigation (those referred
to as the “Produced Protected Material”), identified by bates numbers, to make a CORA request
(in an effort to “undo” the protections of the SPO) if the City did not agree to voluntarily waive
the protections of the SPO:
Ex. 5 [Dkt. 64-5] at 1 (emphasis added).
After the City repeatedly refused to waive confidentiality and Open repeatedly admitted
that the confidential designations could not be challenged under the procedures in the SPO, Open
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 3 of 11
4
used them outside of this litigation to make the CORA request aimed at getting the exact same
documents for use outside of this litigation—indeed, the CORA request is drafted with use and
knowledge 1 of the Produced Protected Material, asking for memoranda “created, produced, or
authored by Dr. Michelle Frey or Vanir Construction Management, Inc. in or around November
2019 through April 2020.” Resp. at 9. The SPO prohibited such use as it expressly limited the
use of Protected Material “only for prosecuting, defending, or attempting to settle this Action.”
SPO [Dkt. 32] §7.1 (emphasis added). Open’s use further violated the SPO’s purpose: “special
protection from public disclosure and from use for any purpose other than prosecuting and
defending this litigation….” Id. §1.1 (emphasis added). Open must be ordered to comply with
the SPO which it stipulated to at the outset of this litigation.
Open cannot skirt around this issue by mischaracterizing the City’s Motion as one for a
determination that the SPO “prohibits Open’s CORA request” (Resp. at 3, 11-13). It is not the
making of “a” CORA request (or whether the City’s refusal of the CORA request was proper) that
is at issue but that Open used the Produced Protected Material to craft it; the violation of the SPO
in turn prohibit this CORA request. Furthermore, Open ignores that “a federal court order issued
pursuant to Rule 26 to prevent the disclosure of documents[, such as the SPO,] renders any state
statute…to the contrary[, such as CORA,] void pursuant to the Supremacy Clause.” 2 Mata
1 Open argues that the SPO does not preclude its use of the “knowledge” of the protected documents in
violation of the SPO (Resp. at 10), in asserting that the CORA request was based on project knowledge.
Not only is this pure argument of counsel without factual evidence or declaration, but the SPO does indeed
cover Open’s use of its knowledge of the protected information outside of this litigation as the scope of the
SPO is broad. SPO [Dkt. 32] §III.
2 All Open can muster is that the line of federal cases cited by the City are “factually and procedurally”
different (Resp. at 12, n.7). But, Open cannot dispute the application of the Supremacy Clause. In fact,
CORA recognizes, at least implicitly, that its provisions allowing for the inspection of public records are
superseded by contrary federal statutes or regulations prohibiting such inspection and where inspection” “is
prohibited by rules promulgated by the supreme court or by the order of any court” C.R.S. §§24-72-
204(1)(b), (c) (emphasis added). There is an Order of this (federal) Court that applies to the documents
sought by Open under CORA. Likewise, Open’s argument that Section VIII concerning open-records
requests was only intended to protect Open and not the City (Resp. at 11) cuts against the clear purpose of
the SPO and other portions of the SPO requiring Open’s full cooperation to protect and respect a designating
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 4 of 11
5
Chorwadi, Inc. v. City of Boynton Beach, 2020 U.S. Dist. LEXIS 86633, at *7 (S.D. Fla. May 18,
2020) (citing cases throughout the country).
This Court should grant the City’s Motion.
B. Open’s Arguments Do Not Excuse Its Violation of the SPO or Defeat the Need for an
Order Requiring Compliance with the SPO.
Open’s remaining arguments lack merit.
First, Open’s counsel’s argument that the documents used for the CORA request in
violation of the SPO were “obtained long before this litigation” by Open is unsupported regardless
of how many times it is stated (Resp. at 1, 2, 5, 10). In fact, Open’s declaration of its President,
Hernando Parrott, lacks any statement that Open “obtained” any of the 17 documents at issue prior
to Open’s improper download after Open had actual knowledge and notice of the litigation filed
against it. See generally Decl. of H. Parrott, Ex. 1 [Dkt. 64-1].3 At most, Mr. Parrott provides a
vague and broad statement that the “parties” had “access” to the documents (id.) but never affirms
that Open actually accessed and downloaded, much less “obtained” into its possession the
documents at issue “long before the litigation.” And Open’s mere “access” terminated (the
confidentiality provision of the MPSA permitted access “solely for the purpose of performing its
obligations under [the MPSA] and not in any way detrimental to [the City]” (MPSA [Dkt. 6] at
111, §3) following the City’s May 28, 2021 notice, and Open was no longer authorized to access
them as Section 13.7 of the MPSA required Open to “destroy all copies of Confidential
Information” upon the City’s termination (id. at 36, §13.7).
party’s Protected Material sought outside of this litigation. SPO [Dkt. 32] §§1.1, 7.1, VIII & XI. If the
Parties had meant to say “Open’s Protected Material” instead of “Designating Party’s” Protected Material
they could have done so.
3 Open cannot fault the City for waiting to confirm the improper access (Resp. at 4) when Open only
recently admitted, through the June 14, 2022, Declaration of Mr. Parrott, that it improperly took, without
authority, certain documents.
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 5 of 11
6
Open argues that Section 13.7 of the MPSA expressly allowed it to “preserve” the
documents as an exception from the duty to destroy and return (Resp. at 3, 8). Open cannot
“preserve” what it did not already possess; Open affirmatively downloaded the documents after
termination of the MPSA and filing of this lawsuit. A fired employee may not download
everything from their former employer under the guise of preservation after being terminated and
sued. Open did not have these documents in its possession at the time of termination to except it
from “destruction” or “return” and its conduct is not excused or permitted by the MPSA. Section
13.7 did not authorize Open to improperly access and take additional confidential documents
following termination and this was clearly not for the “purpose of performing” under the MPSA.
The case cited by Open makes clear that the duty to preserve documents are for those that are
actually “in its possession.” Cache La Poudre Feeds, LLC v. Land O’ Lakes Farmland Feed,
LLC, 244 F.R.D. 614, 620-21 (D. Colo. 2007) (emphasis added). The law does not provide that
parties may go beyond their terminated authority and in violation of contractual terms to
improperly access, without authorization, and take the other party’s documents. Indeed, Open
concedes that the repository was one that “the City kept” and that “[t]he City managed.” Decl.
of H. Parrott [Dkt. 64-1] ¶¶3, 5. In fact, five days after Mr. Parrott received the Complaint filed
in this action on July 2, 2021 (Ex. 2 [Dkt. 62-2]),4 Open expressly confirmed to the City that it
was not authorized to access the City’s Sharepoint site (among numerous other databases) and that
its credentials were revoked “per Fort Collin’s decision to rescind the agreements with Open in
their entirety.” July 7, 2021 Email, Ex. 4 [Dkt. 64-4] at 2-3.
4 The Response asserts that Open only “heard” that the City had filed suit (Resp. at 4) but the documents
show otherwise (Ex. 2). Even Open’s own declaration confirms that it had not merely “heard” about the
filing but that it had actually “learned that the City had filed” the lawsuit pursuant to the direct notice to
Mr. Parrott. Decl. of H. Parrott, Ex. 1 [Dkt. 64-1] ¶7.
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 6 of 11
7
Yet, that same day Open improperly accessed, downloaded, and “obtained”, without
authorization, the documents at issue knowing full well that the City had provided it with its filed
Complaint and with Open otherwise acknowledging that it was no longer authorized to any of the
City’s databases. Decl. of H. Parrott, Ex. 1 [Dkt. 64-1] ¶¶7-8; Decl. of B. Wasko, Ex. 3 [Dkt. 64-
3] ¶3; Ex. 4 [Dkt. 64-4] at 2-3. There is no evidence that any of the documents were actually
“obtained long before this litigation.” Open’s “self-help” aimed at circumventing the discovery
process in this litigation is not a protected activity. Ashman v. Solectron Corp., 2008 U.S. Dist.
LEXIS 98934, *9-10 (N.D. Cal. Dec. 1, 2008) (“Discovery self-help is not a protected activity.”);
Raymond v. Spirit AeroSystems Holdings, Inc., 2017 U.S. Dist. LEXIS 101926, *49 (D. Kan. June
30, 2017) (even in scenario where plaintiffs had legitimate reason to be concerned about the
destruction of documents, “[p]laintiffs’ counsel should have allowed the discovery process to
work, rather than assuming it would be unavailing and taking matters into their own hands”). Open
cannot argue that the protections of the SPO do not apply to documents improperly obtained.
Second, even assuming that Open’s improper taking of the City’s confidential documents
could constitute documents it had “long before litigation,” the Produced Protected Material that
Open improperly used includes both documents taken and then produced by Open and documents
produced by the City under the SPO. While Open now argues that all of the documents at issue
were obtained by it (improperly during the litigation), rather than produced by the City, the
conferral shows otherwise. Contrary to Open’s argument that it was only seeking “public versions
of documents Open already possessed but that were restricted as to Open under the MPSA” only
(Resp. at 5), the actual conferral cited concedes that documents bearing the City’s bates numbers
in Open’s initial conferral email were protected under the SPO—a protection Open admittedly
could not challenge:
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 7 of 11
8
Ex. 8 [Dkt. 64-8] at 3-4 (emphasis added). Regardless of Open’s use of the improperly obtained
documents in violation of the SPO, Open’s use of the City’s confidential production for the CORA
request is an additional violation of the SPO.5
Third, the SPO complements and upholds the confidentiality protections afforded to the
City under the confidentiality provisions of the MPSA. Open’s attempts to distinguish or carve
out the confidentiality provision of the MPSA from the protections of the SPO fail. The SPO
protects all confidential information produced in this litigation bearing the “CONFIDENTIAL”
designation—as each of the 17 Produced Protected Material were. Whether the City or Open
produced the document, all documents designated as “CONFIDENTIAL” were done so under the
terms and protections of the SPO. Any violation of the confidentiality provision of the MPSA is
also a violation of the SPO. If Open really believed its own argument that this Court had no
jurisdiction over the protections afforded by the MPSA (Resp. at 2, 8) and the documents at issue
were really outside of the scope of the SPO (id. at 10), Open would not have asked the City to de-
designate or need to pursue a CORA request.
Fourth, after repeatedly refusing to disclose why it needed to “publicize” the Produced
Protected Material which Open already had in this litigation, Open for the first time asserts that it
is because it wants to “share[] [the Produced Protected Material] with prospective business partners
5 Open seemingly argues that if it simply produces or “re-produces” documents that the City designated as
“Confidential” under the SPO, it can “undo” those protections or otherwise get around the protections
(Resp. at 11, n.6). But, the SPO applies to “all copies” of the Protected Material and “any information” in
the Protected Material, among other things. SPO [Dkt. 32] §III. Accordingly, the protections apply.
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 8 of 11
9
to show that the City’s derogatory claims against Open are spurious.” Resp. at 2. Notwithstanding
the fact that Open provides no support that it even has prospective business partners, this is the
very reason that the Parties stipulated to the SPO and requested that the Court enter the SPO in the
first place. The Parties required “special protection [of any confidential documents produced in
this litigation by either Party] from public disclosure and from use for any purpose other than
prosecuting and defending this litigation.” SPO [Dkt. 32] §1.1 (emphasis added). Now, without
going through the SPO’s procedures to challenge the designations, Open seeks to undercut the
SPO to publicize confidential documents and use them outside of the permitted purpose. In doing
so, Open asserts that the protections afforded under the SPO really only apply to protect Open and
not the City. Resp. at 11 (the SPO “is aimed at protecting Open’s sensitive materials” but is “not
aimed at protecting the City”). This Court should not permit Open’s actions in contravention of
the SPO.
WHEREFORE, the City requests that this Court GRANT its Motion.
Submitted this 12th day of July, 2022.
DORSEY & WHITNEY LLP
s/ Andrea Ahn Wechter
Case Collard
Andrea Ahn Wechter
Maral J. Shoaei
1400 Wewatta Street, Suite 400
Denver, Colorado 80202-5549
Telephone: (303) 629-3400
Fax: (303) 629-3450
E-mail: collard.case@dorsey.com
E-mail: wechter.andrea@dorsey.com
E-mail: shoaei.maral@dorsey.com
Attorneys for Plaintiff
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 9 of 11
10
CERTIFICATE OF COMPLIANCE
I hereby certify that the foregoing pleading complies with the type-volume limitations set
forth in Judge Daniel D. Domenico’s Practice Standard III(A)(1) and contains 2,692 words.
s/ Andrea Ahn Wechter
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 10 of 11
11
CERTIFICATE OF SERVICE
I hereby certify that on July 12, 2022, I caused the foregoing document to be filed via CM/ECF system which will send notification of such filing to the following:
Alexander D. White
Paul D. Swanson
Hannah E. Armentrout
Anna C. Van de Stouwe
HOLLAND & HART LLP
555 17th Street, Suite 3200
Denver, CO 80202
Telephone: (303) 295-8578
adwhite@hollandhart.com
pdswanson@hollandhart.com
hearmentrout@hollandhart.com
acvandestouwe@hollandhart.com
Attorneys for Defendants
s/ Stacy Starr
Dorsey & Whitney LLP
Case 1:21-cv-02063-DDD-NYW Document 84 Filed 07/12/22 USDC Colorado Page 11 of 11