• June 30, 2011

Plaintiff sues Defendants A, B, C, and D, settling with C & D.

(1) Can A &B seek Plaintiff’s settlement agreements with C & D in discovery from Plaintiff?

(2) Can Plaintiff shield the settlement agreements with C & D from discovery as “irrelevant” to Plaintiff’s claims against A & B or by arguing that any “probative value” is outweighed by the “unfairly prejudicial” effect of their disclosure (or “undue burden”)?

(3) If Defendant A serves discovery for the settlement agreements and successfully moves to compel production, can Defendant B file a “me, too” brief for the settlement agreements even though Defendant B never served discovery seeking the settlement agreements?

At least in one recent federal court decision:

(1)  Yes.

(2)  No.

(3)  No.

For this post, Minnesota Litigator wanders outside its jurisdiction to highlight Volumetrics Medical v. Toshiba America Medical Systems, et al., a recent case from the U.S. federal court in the Middle District of Tennessee, where this issue came up.  The court’s analysis (Mag. Judge L. Patrick Auld) is straightforward and clear and this, of course, is a very common scenario in multi-party litigation.

The Volumetrics case is patent litigation.  Judge Auld pointed out that the settlement agreements were relevant to the issue of Plaintiff’s claimed damages (that is, in determining what a “reasonable royalty” is).  There had been a split among district courts on this score before the Federal Circuit’s 2010 Resqnet.com decision but that case, the court found, made the answer to the issue before the court clear.

Judge Auld, in fact, found the question so straight-forward in the post-Resqnet.com world that he ordered Volumetrics to “show cause” for why it should not be ordered to pay defendant’s attorneys’ fees and costs for the motion to compel production of the settlement agreements.

The decision is also interesting in that co-defendant Toshiba sought to “piggy back” on co-defendant Siemens work with what litigators call a “me too brief,” a brief in which a co-party on the same side of litigation seeks efficiencies by filing a very short motion saying, essentially, “If my fellow litigant wins her motion, I should be deemed to have filed one too and should win mine too.”

While such motions are common, Judge Auld rejected the gambit here.  Whether this “disparate outcome” will have any consequences in the particular case is unknowable from this distance.  But the case stands as a “heads up” for litigators that riding on the coat-tails of a co-party — “free-loading” — carries some risk.

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