United States District Court, District of Minnesota
November 3, 2014
Select Comfort Corporation, Plaintiff/Counter-Defendant,
Tempur Sealy International, Inc., doing business as Tempur-Pedic, Defendant/Counter-Claimant, Mattress Firm Holding Corp., doing business as Mattress Firm, Defendant
Andrew S. Hansen, Dennis E. Hansen, Samuel R. Hellfeld, and Elizabeth A. Patton, Esqs., Oppenheimer Wolff & Donnelly LLP, Minneapolis, Minnesota, for Plaintiff.
Arthur S. Beeman, Esq., Arent Fox LLP, San Francisco, California, for Defendant Tempur Sealy International, Inc.
John W. Ursu, Robert J. Gilbertson, and X. Kevin Zhao, Esqs., Greene Espel PLLP, Minneapolis, Minnesota, for Defendant Tempur Sealy International, Inc.
Matthew Wright and Pamela M. Deese, Esqs., Arent Fox LLP, Washington, District of Columbia, for Defendant Tempur Sealy International, Inc.
Brian D. Roche, Jennifer DePriest, Jillian Burstein, Vanessa Marti Heftman, and William Weltman, Esqs., Reed Smith LLP, Chicago, IL, for Defendant Mattress Firm Holding Corp.
David T. Schultz and Michael C. McCarthy, Esqs., Maslon Edelman Borman & Brand, LLP, Minneapolis, MN, for Defendant Mattress Firm Holding Corp.
STEVEN E. RAU, United States Magistrate Judge.
The above-captioned case comes before the undersigned on Plaintiff Select Comfort Corporation's (" Select Comfort") Motion to Compel Discovery from Defendant Tempur Sealy International, Inc., doing business as Tempur-Pedic (" Tempur-Pedic") (" Motion to Compel--Tempur-Pedic") [Doc. No. 81] and Motion to Compel Discovery from Defendant Mattress Firm Holding Corp., doing business as Mattress Firm (" Mattress Firm") (" Motion to Compel--Mattress Firm") [Doc. No. 88]. This matter has been referred for the resolution of pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(A) and District of Minnesota Local Rule 72.1. For the reasons stated below, the Motion to Compel--Tempur-Pedic is granted and the Motion to Compel--Mattress Firm is granted in part and denied in part.
This case arises out of the competition between Select Comfort's " m series" Sleep Number beds and Tempur-Pedic's " Tempur-Choice" mattresses. See (Am. Compl.) [Doc. No. 8 ¶ 20-21]. Select Comfort accuses Tempur-Pedic of disseminating " false, misleading, disparaging, and deceptive advertisements directly to consumers in [an] attempt to divert consumers from Select Comfort to Tempur-Pedic." ( Id. ¶ ¶ 22-33). Mattress Firm is a retailer that sells Tempur-Pedic products and uses Tempur-Pedic's allegedly " false, misleading, disparaging[, ] and deceptive advertising and training materials." ( Id. ¶ ¶ 34-35). The Motions to Compel arise out of Select Comfort's claims for false advertising against both Tempur-Pedic and Mattress Firm (collectively " Defendants"). See (Mots. to Compel).
The Honorable Donovan W. Frank preliminarily enjoined Mattress Firm from making certain representations about Select Comfort and its products and services. See (Order Dated Dec. 23, 2013) [Doc. No. 59]. Judge Frank also dismissed claims for violations of the Minnesota Unlawful Trade Practices Act (" MUTPA"), violations of the Minnesota False Statement in Advertising Act (" MFSAA"), and violations of the Minnesota Consumer Fraud Act (" MCFA") against Mattress Firm. See (Order Dated Apr. 8, 2014) [Doc. No. 74]. Tempur-Pedic makes counterclaims against Select Comfort for unfair competition, false advertising, trade and product disparagement, and tortious interference with prospective economic advantage. (Tempur-Pedic's Am. Answer & Countercls., " Answer & Countercls.") [Doc. No. 72 ¶ ¶ 162, 176-99].
Select Comfort filed the Motions to Compel on August 29, 2014, and oral argument was heard on September 12, 2014. See (Mots. to Compel); (Minute Entry Dated Sept. 12, 2014) [Doc. No. 110]. Mattress Firm and Select Comfort provided additional information to the Court in October 2014. See (Mattress Firm's Notice Regarding Select Comfort's Supplemental Interrog. Resp. Related to Pre-2012 Conduct, " Mattress Firm's Notice") [Doc. No. 116]; (Pl.'s Resp. to Mattress Firm's Notice Regarding Select Comfort's Supplemental Interrog. Resp. Related to Pre-2012 Conduct, " Select Comfort's Resp. to Mattress Firm's Notice") [Doc. No. 119]. The Court addresses each Motion to Compel in turn.
II. MOTION TO COMPEL--TEMPUR-PEDIC
Select Comfort seeks an order compelling discovery from Tempur-Pedic in three categories: financial information, information regarding Tempur-Pedic's claim that its foam is proprietary, and information regarding Tempur-Pedic's claim that Sleep Number beds hammock. (Pl.'s Mem. of Law in Supp. of its Mot. to Compel--Tempur-Pedic, " Mem. in Supp.--Tempur-Pedic") [Doc. No. 83 at 5-12]. These claims relate to Select Comfort's allegation that Tempur-Pedic engaged in false advertising with respect to Select Comfort's Sleep Number beds and Tempur-Pedic's Tempur-Choice beds. ( Id. at 2-4).
A. Financial Information
1. The Parties' Arguments
Select Comfort seeks information regarding Tempur-Pedic's sales and expenses from January 1, 2011, to the present. See (Mem. in Supp.--Tempur-Pedic at 5-8). Select Comfort argues it needs information on all lines of Tempur-Pedic's beds because Tempur-Pedic has put its financial gains and losses at issue in its counterclaim and because consumers may have purchased a competing mattress--other than the Tempur-Choice line--as a result of Tempur-Pedic's alleged false advertising. ( Id. at 5, 15). Additionally, Select Comfort argues it needs financial information dating back to 2011 because it needs context to " properly evaluate any boost in Tempur-Pedic's sales as a result of its conduct." ( Id. at 15). Finally, Select Comfort argues Tempur-Pedic must produce sales information broken down into sales by product and retailer so that Select Comfort can analyze the effect of false advertising, and Tempur-Pedic must produce expense information broken down into categories of advertising and marketing, direct sales, and overhead. ( Id. at 16-17); see also (Interrog. No. 13).
Tempur-Pedic objects for several reasons: As an initial matter, Tempur-Pedic argues this information is " confidential commercial information" entitled to the same protection as trade secrets. (Def. Tempur-Pedic's Mem. in Opp'n to Pl.'s Mot. to Compel Disc., " Tempur-Pedic's Mem. in Opp'n") [Doc. No. 96 at 15]. Tempur-Pedic next argues that only the Tempur-Choice mattress and an advertisement used during part of 2013 are at issue, and therefore, discovery about all of Tempur-Pedic's products since 2011 is irrelevant. ( Id. at 16-17). More specifically, Tempur-Pedic argues it did not put other lines of Tempur-Pedic beds at issue in its counterclaim and financial information from the period before January 2013 is not necessary to provide context for Select Comfort's damages. ( Id. at 18-20). Tempur-Pedic also argues that any reliance on allegedly false advertising could not have taken place before 2013, when the Tempur-Choice bed was introduced. ( Id. at 20-21).
The Federal Rules permit " discovery regarding any nonprivileged matter that is relevant to any party's claim or defense--including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter." Fed.R.Civ.P. 26(b)(1). " Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id.
Nevertheless, discovery is not boundless, and must be limited if:
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.
Fed. R. Civ. P. 26(b)(2)(C). Courts have broad discretion to decide discovery motions. Pavlik v. Cargill, Inc., 9 F.3d 710, 714 (8th Cir. 1993).
To the extent Tempur-Pedic argues this information need not be disclosed because it is " confidential commercial information, " Tempur-Pedic has made no showing that the Protective Order in this case, which was stipulated to by all parties, is inadequate to protect against unreasonable disclosure. See (Protective Order) [Doc. No. 80].
The Court finds that the financial information Select Comfort seeks about all Tempur-Pedic mattress products, not just the Tempur-Choice mattress, is relevant to Select Comfort's claims and relevant to Select Comfort's defenses against Tempur-Pedic's counterclaims. See Fed.R.Civ.P. 26(b)(1). Select Comfort's false advertising claims relate both to what Tempur-Pedic said about Select Comfort's " m series" mattress as well as what it said about the Tempur-Choice products. See, e.g., (Am. Compl. ¶ ¶ 19-33). Therefore, Select Comfort is entitled to explore to what extent, if any, Tempur-Pedic's allegedly false advertising drove customers away from Select Comfort, regardless of whether those same customers were driven to Tempur-Choice, the directly competing mattress, or another Tempur-Pedic product. See ( id . at ¶ 105) (" Defendants' acts as described above were completed with the intent to interfere with Select Comfort's ability to sell products to consumers and for the purposes of wrongfully and unjustifiably converting would-be Select Comfort customers into customers for Defendants.").
Additionally, Tempur-Pedic's counterclaims are made with respect to Select Comfort's allegedly false advertising about Tempur-Pedic products, and do not appear to be strictly limited to the Tempur-Choice mattress. See, e.g., (Answer & Countercls. ¶ 177) (" In violation of 15 U.S.C. § 1125(a)(1)(B), Select Comfort intentionally and willfully disseminated or permitted the dissemination of false, misleading, and deceptive factual representations regarding the nature, characteristics, and qualities of Tempur Sealy's mattress products, including its 'TEMPUR-Choice' mattresses, which are goods distributed in interstate commerce[.]"). Therefore, financial information about all types of Tempur-Pedic beds, not just the Tempur-Choice, is relevant to Select Comfort's defense against Tempur-Pedic's counterclaims.
Finally, the Court finds that seeking financial information dating back to 2011 is relevant to Select Comfort's claim that Tempur-Pedic's acts drove customers from Select Comfort to Tempur-Pedic. (Am. Compl. ¶ 105). Select Comfort is entitled to compare financial data from the two-year period before the allegedly false advertising took place to financial data from the period during which the allegedly false advertising took place in order to accurately assess its damages.
In summary, the Motion to Compel--Tempur-Pedic with respect to financial information, Interrogatory Numbers 12 and 13, and Requests for Production of Documents Numbers 32 and 33, is granted. See (Mem. in Supp.--Tempur-Pedic at 5-8). Whether, and to what extent, this information is ultimately useful or admissible at trial is not currently before the Court.
B. " Hammocking" Claim
In a Tempur-Pedic flyer attached to the Complaint, Tempur-Pedic claims that its Tempur-Choice bed does not hammock. (Ex. C, the " Flyer, " Attached to Am. Compl.) [Doc. No. 8-3]. The Flyer shows a drawing of a person lying on a bed in a perfectly horizontal position under the Tempur-Choice heading, while the person lying on a bed under a heading reading " Sleep Number M-Series" is shown to have his or her body bowed slightly in the middle. See (Flyer). This bowed position is referred to as " hammocking." (Mem. in Supp.--Tempur-Pedic at 10, 20). In Interrogatory Number 11, Select Comfort seeks the basis for Tempur-Pedic's claims in the Flyer. ( Id. at 11). The parties' dispute with respect to Interrogatory 11 is focused on Tempur-Pedic's hammocking claim. ( Id. at 10-11). Select Comfort argues that the Flyer depicts hammocking of Select Comfort beds, although Tempur-Pedic disagrees. ( Id. at 10); see also, e.g., (Ex. 8, Attached to Aff. of Dennis E. Hansen in Supp. of Pl.'s Mot. to Compel--Tempur-Pedic, " Hansen Aff.") [Doc. No. 84-2].
During the meet-and-confer process, Tempur-Pedic responded that it has no further information to produce, although it " reserves the right to present expert opinion testimony in further support of the claims made in [the Flyer] in accordance with the Scheduling Order." (Tempur-Pedic's Mem. in Opp'n at 3-4); see also (Hansen Aff. ¶ 4); (Ex. 3, Attached to Hansen Aff.) [Doc. No. 84-1 at 10]. At the hearing, counsel for Tempur-Pedic further argued that a single-zone chamber, as used in Select Comfort products, can lead to a hammocking effect, and it would be willing to supplement its interrogatory to this effect. (Tr. at 22:6-24);  see also (Flyer).
The Court finds Tempur-Pedic must provide a supplementary response to Interrogatory Number 11 that specifically addresses hammocking. To the extent Tempur-Pedic argues it has no further information to provide, its supplemental response should state the same. The Motion to Compel--Tempur-Pedic is granted with respect to the hammocking claim.
C. Proprietary Foam
1. The Parties' Arguments
Select Comfort seeks documents relating to the truth or falsity of Tempur-Pedic's claim that the foam it uses is proprietary, as claimed in the Flyer. (Mem. in Supp.--Tempur-Pedic at 8, 17); see also (Flyer). Specifically, Select Comfort's relevant requests for production of documents seek documents " relating or referring to the claim that [Tempur-Pedic] use[s] a proprietary formula for foam in [its] products" and documents " related to or generated during the development of or decision to use the claim that [Tempur-Pedic] use[s] a proprietary formula in [its] products." (Mem. in Supp.--Tempur-Pedic at 9). In its proposed order, Select Comfort specifically seeks " documents regarding [Tempur-Pedic's] claim that its foam is 'proprietary.' Such documents should include, but should not be necessarily limited to, foam specifications, agreements related to the foam or its 'proprietary' nature, licensing agreement[s] related to the foam, and documents related to use of the foam in other brands of mattresses." (Tempur-Pedic's Mem. in Opp'n at 4) (citing Select Comfort's Proposed Order regarding the Motion to Compel--Tempur-Pedic). The Court disagrees with Tempur-Pedic's assertion that Select Comfort is attempting to broaden its discovery request. Cf . ( id .). Instead, the Court finds that Select Comfort's proposed order provides helpful clarification regarding what, exactly, it seeks.
Tempur-Pedic refuses to produce these documents, arguing they constitute trade secrets. (Mem. in Supp.--Tempur-Pedic at 17). Instead, Tempur-Pedic proposed to let Select Comfort's outside counsel tour Tempur-Pedic's manufacturing facility to answer any questions Select Comfort has about the proprietary nature of its foam. ( Id. at 18).
Tempur-Pedic argues that under Eighth Circuit law, Tempur-Pedic's proprietary information is a trade secret that should not be disclosed. See generally (Tempur-Pedic's Mem. in Opp'n at 4-14). More specifically, Tempur-Pedic argues that the proprietary information is considered a trade secret under Kentucky law; additional disclosures are not relevant in light of the affidavit Tempur-Pedic provided, which, according to Tempur-Pedic, demonstrates that Tempur-Pedic's claims about the proprietary nature of its foam are literally true; Select Comfort has failed to show a need for the trade secret; and any need does not outweigh the potential harm of disclosure. ( Id. at 7-14).
2. Legal Standard
Although discovery is broad, " in certain cases, discovery of trade secrets should either be limited or not permitted." In re Remington Arms Co., 952 F.2d 1029, 1032 (8th Cir. 1991) (citing Fed.R.Civ.P. 26(c)(1)(G)). The Eighth Circuit has established a burden-shifting test to make this determination:
(1) the party opposing discovery must first demonstrate that the information at issue is a trade secret under Rule 26(c)(1)(G) and that its disclosure would be harmful to the party's interest in the property; (2) the burden then shifts to the requesting party to show that the information is relevant to the lawsuit and is necessary to prepare the case for trial; and (3) if the requesting party demonstrates relevance and need, the court must weigh the injury that disclosure might cause against the moving party's need for the information.
Taiyo Int'l, Inc. v. Phyto Tech. Corp., 275 F.R.D. 497, 500 (D. Minn. 2011) (DSD/JJK) (citing Remington Arms, 952 F.2d at 1032).
3. Whether Tempur-Pedic's Foam Specifications Constitute a Trade Secret
Tempur-Pedic argues that the specifications of its foam constitute a trade secret. (Tempur-Pedic's Mem. in Opp'n at 8-9). Tempur-Pedic relies on a federal case in Texas and an affidavit for this proposition. See ( id .); see also ( id . at 5). In the Texas case, the court said that Tempur-Pedic's foam was " proprietary" and " a valuable, highly confidential trade secret." Tempur-Pedic, Int'l, Inc. v. Angel Beds LLC, 902 F.Supp.2d 958, 961 (S.D. Tex. 2012). But in making this statement, the Texas court cited what appears to be the complaint, and was considering a motion to dismiss and a motion for a more definite statement. Id. at 960. Thus, the Texas court's decision did not make this statement as a finding of fact, but rather was simply reciting alleged facts--it is therefore not persuasive nor is it conclusive regarding the legal issue of whether the foam is in fact proprietary.
Minnesota defines a trade secret as
information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Minn. Stat. § 325C.01, subdiv. 5. The Court finds that Tempur-Pedic's foam specifications constitute a trade secret for the purpose of discovery in this case because it is information that has economic value and is not known to others or readily ascertainable by others who can obtain economic value from its disclosure or use. See (Decl. of Mikkelsen, " Mikkelsen Decl.") [Doc. No. 97 ¶ ¶ 4-7). Additionally, Tempur-Pedic takes reasonable efforts to maintain its secrecy. ( Id. ¶ ¶ 8-11).
4. Relevancy to the Instant Case
Tempur-Pedic argues that it is " literally true" that its foam is proprietary. (Tempur-Pedic's Mem. in Opp'n at 10). But this assertion, backed up only by a Tempur-Pedic employee's assertion, is central to Select Comfort's claim that Tempur-Pedic's proprietary assertions are false. Thus, discovery designed to prove the truth of the assertion in Tempur-Pedic's allegedly false advertising is both relevant and necessary to Select Comfort's false advertising claims against Tempur-Pedic.
5. Consideration of Potential Injury to Tempur-Pedic
The parties' stipulated Protective Order provided all parties an opportunity to designate materials as " Highly-Confidential--Outside Counsel Only Information." (Protective Order ¶ ¶ 7-13). Additionally, this agreement was specifically reached with trade secrets in mind. See ( id . at 7) (" 'Highly Confidential--Outside Counsel Only Information, ' as used herein, means a document or information that a Designating Person, for good cause, designates as 'Highly Confidential--Outside Counsel Only' because it relates to trade secrets . . . .") (emphasis added). Based on this provision of the Protective Order, the Court finds Tempur-Pedic is sufficiently protected from potential injury. See Taiyo Int'l, Inc., 275 F.R.D. at 501-02 (stating that " [w]here the parties have agreed to a protective order, particularly one with 'Attorneys' Eyes Only' designation, even a very sensitive trade secret will be sufficiently protected and should be produced if relevant" and noting that limiting information to attorneys only should be used sparingly and only for " a party's most secret information").
6. Conclusion Regarding Trade Secret Information
In conclusion, the Court finds that for the purposes of Select Comfort's Motion to Compel--Tempur-Pedic, the specifications of Tempur-Pedic's foam is a trade secret under Minnesota law. But because the information is relevant and necessary, and because a highly restrictive Protective Order, negotiated and agreed to by the parties, is in place, Tempur-Pedic is adequately protected against potential injury. The Court's finding regarding the trade secret is limited to the purpose of discovery only, because the only way for Select Comfort to prove that Tempur-Pedic's claim that its foam is proprietary is false is by obtaining discovery that allows it to support its contentions. See (Reply in Supp.--Tempur-Pedic at 3); see also (Ex. 14, Attached to Second Aff. of Dennis E. Hansen in Supp. of Mot. to Compel--Tempur-Pedic) [Doc. No. 105-1].
Tempur-Pedic does not argue that Select Comfort's remaining requests regarding its proprietary claim are trade secrets. See (Tempur-Pedic's Mem. in Opp'n at 4-14). The Court finds that these requests are relevant to Select Comfort's false advertising claims, and therefore Tempur-Pedic must produce agreements related to the foam's proprietary nature, any licensing agreements related to the foam, and any documents related to the use of foam in other brands of mattresses.
III. MOTION TO COMPEL--MATTRESS FIRM
Select Comfort seeks an order compelling discovery from Mattress Firm in two categories: Financial information and the identity of " employees or agents who made false and disparaging claims about Select Comfort and its products." (Pl.'s Mem. of Law in Supp. of its Mot. to Compel--Mattress Firm, " Mem. in Supp.--Mattress Firm") [Doc. No. 90 at 1]. The parties have since resolved their dispute regarding the identity of the employees (Plaintiff's Interrogatory Number 18), and the Court will therefore deny this portion of Select Comfort's Motion to Compel--Mattress Firm as moot. See (Letter to Mag. Judge Dated Sept. 19, 2014) [Doc. No. 111]. Thus, the only remaining issue is that of the financial information. (Mem. in Supp.--Mattress Firm at 1).
A. The Parties' Arguments
Select Comfort seeks financial information from Mattress Firm in several categories. First, Select Comfort seeks financial data related to products (both beds and associated accessories such as sheets and pillow) other than Tempur-Choice because it argues Mattress Firm steered consumers to Tempur-Choice and other brands, and Select Comfort needs the financial information to assess its damages. (Mem. in Supp.--Mattress Firm at 5). Second, Select Comfort seeks financial information prior to the release of the Tempur-Choice bed because " Mattress Firm employees were disparaging Select Comfort long before the Tempur-Choice beds were released" and Select Comfort needs to compare sales from before the disparagement to sales during the disparagement for its damages analysis. ( Id. at 5-6) (citing Am. Compl. ¶ 53); see also ( id . at 15-17). Select Comfort also argues it needs sales data from 2005-2009, the period of the dealer agreement, to show that Mattress Firm's claims " that it stopped selling Select Comfort products due to quality issues and the high volume of customer returns" are false. ( Id. at 6, 17-18). Finally, Select Comfort argues Mattress Firm must produce details of costs and expenses associated with sales so that Select Comfort can analyze wrongful profits and verify any claims Mattress Firm may make regarding the deduction of costs and expenses from its revenue figures. ( Id. at 18-19).
Mattress Firm has only agreed to produce financial information related to the Tempur-Choice bed and information available in annual reports filed with the Security and Exchange Commission. ( Id. at 14). Mattress Firm objects to producing the additional financial information for several reasons: First, Mattress Firm argues that Tempur-Choice is the only competing product at issue in this case, sales figures related to other beds are irrelevant, and Select Comfort has no right to obtain this " highly sensitive" information. (Def. Mattress Firm's Resp. to Pl.'s Mot. to Compel--Mattress Firm) [Doc. No. 99 at 11-15]. Second, Mattress Firm asserts that sales data from 2005-2009, when Mattress Firm sold Select Comfort products, is not relevant to damages related to allegedly false statements made in 2012-2013 because no false statements are alleged prior to 2012 and because Mattress Firm as a company has changed so significantly that the numbers would not provide a meaningful comparison. ( Id. at 15-17). Third, Mattress Firm argues that Select Comfort is not entitled to financial information related to other, non-mattress products, such as sheets and pillows, because these products are not bundled with mattresses. ( Id. at 17-19). Fourth, Mattress Firm argues that cost and expense data relevant to products other than the Tempur-Choice bed is not discoverable because Select Comfort has not shown that this information " concerns 'the allegedly falsely advertised products.'" ( Id. at 19). Finally, Mattress Firm argues that the interrogatories and requests for production of documents at issue in the instant Motion to Compel do not seek return information. ( Id. at 20-21). To the extent Select Comfort specifically requested that information, it did so after filing its Motion to Compel, and Mattress Firm argues the issue is not ripe for review at this time. ( Id. at 21).
After the hearing, the parties submitted supplemental briefing. Mattress Firm argued that one of Select Comfort's supplemental interrogatory responses stated that " Select Comfort does not intend to assert [false and/or misleading statements] as a basis for its claims in this litigation" if those statements were made before 2012. (Mattress Firm's Notice at 2). Select Comfort responded that information dating back to 2009 is " relevant and discoverable" because it " provide[s] context and set[s] benchmarks to measure the impact of Mattress Firm's wrongful conduct." (Select Comfort's Resp. to Mattress Firm's Notice at 2).
The Court relies on the standard of relevance outlined above in connection with Select Comfort's Motion to Compel--Tempur-Pedic.
To the extent Mattress Firm argues that the requested information is " highly sensitive, " Mattress Firm has made no showing that the Protective Order in this case, which was stipulated to by all parties, is inadequate to protect it against unreasonable disclosure. See (Protective Order).
The Court finds that the financial information Select Comfort seeks must be provided as it relates to all mattress products, not just the Tempur-Choice mattress. This information is relevant to Select Comfort's claims that Mattress Firm's allegedly false advertising drove customers away from Select Comfort products. See, e.g., (Am. Compl. ¶ ¶ 46-48). Select Comfort is entitled to financial information to determine whether and to what extent potential customers were persuaded by Mattress Firm's alleged false advertising, regardless of whether the potential customers purchased a Tempur-Choice mattress, a different type of Tempur-Pedic mattress, or some other brand of mattress. However, the Court finds that Mattress Firm's financial information related to non-mattress products, such as sheets and pillows, is not relevant to Select Comfort's claims and is therefore not discoverable.
The Court also finds that financial information beginning in 2007, two years before the retailer relationship agreement ended, is relevant to Select Comfort's potential damages comparison. Regardless of what Select Comfort ultimately asserts or attempts to prove at trial, at this stage of the litigation, Select Comfort alleges that Mattress Firm made disparaging remarks about Select Comfort shortly after the retail agreement expired in 2009. (Mem. in Supp.--Mattress Firm at 17). Therefore, Select Comfort is entitled to financial information in the following damages periods: (1) from 2007 to 2009, the last two years of the retailer agreement during which no disparaging statements are alleged; (2) 2009 to mid-2013, after the expiration of the dealership agreement but before the Tempur-Choice bed was introduced; and (3) mid-2013 to the present, the time period that the Tempur-Choice bed has been available at Mattress Firm. These various time periods will enable Select Comfort to draw several comparisons to various time frames to better assess its damages and present them to a jury. As with Tempur-Pedic's financial information, to what extent this information is useful or admissible at trial is not at issue here, but because the information is relevant, it is within the boundaries of discoverable information as described in this Order.
Based on the foregoing, and all the files, records, and proceedings herein, IT IS HEREBY ORDERED that
1. Plaintiff Select Comfort Corporation's Motion to Compel Discovery from Defendant Tempur Sealy International, Inc., doing business as Tempur-Pedic [Doc. No. 81] is GRANTED as follows:
a. To the extent Select Comfort seeks to compel financial information pursuant to its Interrogatory Numbers 12 and 13, and Requests for Production of Documents Number 32 and 33, the Motion is GRANTED;
b. To the extent Select Comfort seeks to compel information pursuant to Interrogatory Number 11, the Motion is GRANTED, and Tempur-Pedic must provide a supplemental response that specifically addresses hammocking; and
c. To the extent Select Comfort seeks to compel information related to its Requests for Production of Documents Number 23 and 24, the Motion is GRANTED, and Tempur-Pedic must produce documents regarding its claim that its foam is " proprietary." Such documents should include, but should not be necessarily limited to, foam specifications, agreements related to the foam or its " proprietary" nature, licensing agreements related to the foam, and documents related to use of the foam in other brands of mattresses.
2. Plaintiff Select Comfort Corporation's Motion to Compel Discovery from Defendant Mattress Firm Holding Corp., doing business as Mattress Firm [Doc. No. 88] is GRANTED in part and DENIED in part.
a. To the extent Select Comfort seeks to compel information related to Plaintiff's Interrogatory Number 18, the Motion to Compel is DENIED as moot based on the parties' resolution of this issue.
b. To the extent Select Comfort seeks to compel financial information related to its Interrogatory Numbers 11 and 12 and Requests for Production of Documents Number 79 and 80, the Motion is GRANTED in part, and Mattress Firm must respond to those Interrogatories and Requests for Production of Documents as they apply to all mattress products and for the time period 2007 to the present; and
c. The Motion is DENIED in all other respects.