TABLE OF CONTENTS
|TABLE OF AUTHORITIES
|STATEMENT OF ISSUES ON APPEAL
|STATEMENT OF THE CASE
|STANDARD OF REVIEW
IN CIVIL ACTIONS DISCOVERY
|A.|| The Clear
and Unambiguous Language of the Trade
Secrets Act Limits its Application to Actions Involving
Misappropriation of Trade Secrets Located in South
|B.||The History of the Trade Secrets Act Confirms that it
was not Intended to Apply to Products Liability Actions
|C.||The South Carolina Trade Secrets Act is Inapplicable
Because the Trade Secret Information at Issue is in
Japan, not South Carolina
|D.||The Petitioner’s Interpretation of the Trade Secrets
Act Conflicts with the South Carolina Rules of Civil
|II.||ASSUMING THAT THE TRADE SECRETS ACT IS
THE RESPONDENTS HAVE MADE THE REQUISITE SHOWING
OF SUBSTANTIAL NEED FOR DISCOVERY OF TRADE SECRET
NEED FOR DISCOVERY OF TRADE SECRET INFORMATION.
|III.||UNDER THE APPLICABLE STANDARD FOR THE
PRODUCTION OF TRADE SECRETS SET FORTH BY RULE
26(c)(7), SCRCP, THE RESPONDENTS HAVE ESTABLISHED
BOTH RELEVANCE AND NECESSITY TO WARRANT THE
PRODUCTION OF THE SKIM-STOCK FORMULA
PETITIONER HAS ATTEMPTED TO PREVENT
RESPONDENTS ACCESS TO RELEVANT AND NECESSARY
INFORMATION BY MAKING ARGUMENTS THAT
MISCHARACTERIZE THE RECORD
|V.||THE PETITIONER HAS NOT
MADE ANY SHOWING THAT
COMPETITIVE HARM IS LIKELY TO RESULT FROM
LIMITED DISCLOSURE OF THE SKIM COMPOUND
DOCUMENTS IN THIS SPECIFIC CASE.
TABLE OF AUTHORITIES
|Baggerly v. CSX Transportation, Inc.,
370 S.C. 362, 635 S.E.2d 97 (2006)
|Bragg v. Hi-Ranger, Inc.,
319 S.C. 531, 462 S.E.2d 321 (Ct. App. 1995)
|Bridgestone v. Mayberry,
878 N.E.2d 189 (Ind. 2007)
|Clark v. Cantrell,
339 S.C. 369, 529 S.E.2d 528 (2000)
|Claytor v. General Motors Corp.,
277 S.C. 259, 286 S.E.2d 129 (1982)
|Coca-Cola Bottling Co. of Shreveport, Inc. v. Coca-Cola Co.,
107 F.R.D. 288 (D.Del. 1985)
|Ex Parte Sealed Air Corp.,
220 F.R.D. 452, 70 U.S.P.Q.2d 1575 (D.S.C. 2004); citing, Duplan Corp. v. Deering
Milliken, Inc., 397 F. Supp. 1146, 1185 (D.S.C. 1974)
|Federal Open Market Committee of the Federal Reserve System
442 U.S 340, 99 S. Ct. 2800, 61 L.Ed. 587 (1979)
|Grasselli Chemical Corp. v. National Aniline & Chemical
282 Fed 379 (S.D. N.Y. 1920)
|Greigo v. Ford Motor Company,
19 F. Supp. 2d 531 (D. S.C. 1998)
|In re Remington Arms Company, Inc.,
952 F.2d 1029, 22 U.S.P.Q.2d 1063 (8th Cir. 1991)
|Law v. S.C. Dept. of Corrections,
368 S.C. 424, 629 S.E.2d 642 (2006)
|Little v. Brown & Williamson Tobacco, Corp.,
243 F. Supp.2d 480 (D.S.C. 2001)
|Mann v. Cooper Tire Company,
816 N.Y.S.2d 45 (N.Y. 2006)
|MDK, Incorporated v. Mike’s Train House, Inc.,
27 F.3d 116, 29 Fed. R. Serv. 3d 1472 (4th Cir. 1994)
|Mims Amusement v. Law Enforcement Div.,
366 S.C. 141, 621 S.E.2d 344 (2005)
|Rodriguez v. Bridgestone Firestone North American Tire, LLC
Corporation, Circuit Court, Hillsborough County, Florida, Civil Division Case Number
01-4696 Division F
|Rose v. Beasley,
327 S.C. 197, 489 S.E.2d 625 (1997)
|S.C. Code Ann. § 14-3-640
|S.C. Code Ann. § 39-8-10
|S.C. Code Ann. § 39-8-30
|S.C. Code Ann. § 39-8-60(B)
|S.C. Code Ann. § 39-8-60(J)
|S.C. Code Ann. § 39-8-100
|S.C. Code Ann. § 39-8-110(B) and (C)
||15, 16, 17, 19|
|50 State Statutory Surveys Intellectual Property Trademarks
and Trade Secrets , Thompson West 2007
|8 C. Wright & Miller, Federal Practice & Procedure:
Civil § 2043, at 301 (1970)
|Engineering Analysis Report and Initial Decision Regarding
Firestone Wilderness AT Tires, USDOT October 2001, p. 8
|Hubbard and Felix, The South Carolina Law of Torts (3rd Ed. 2004) p. 299
|Rule 26(c), SCRCP
|Rule 26(c), FRCP
|Uniform Act, § 39-8-7||17|
STATEMENT OF ISSUES ON APPEAL
|I.||WHETHER THE DISCOVERY OF TRADE SECRET INFORMATION IN A PRODUCTS
LIABILITY ACTION IS GOVERNED BY RULE 26 SCRCP OR THE SOUTH CAROLINA TRADE
|II.||WHETHER THE TRIAL COURT ABUSED ITS DISCRETION IN FINDING THAT THE DESIGN INFORMATION FOR THE FAILED TIME WAS RELEVANT AND NECESSARY TO PROVE RESPONDENTS’ CASE SUCH THAT IT SHOULD BE PRODUCED UNDER A RESTRICTIVE PROTECTIVE ORDER.|
STATEMENT OF THE CASE
These cases arise from a single car accident that occurred on July 16, 2005, on I-95 in Hampton County. Angela Plyler and her three minor children were returning from Bluffton to Richland County when the left rear tire on their 1999 Ford Explorer catastrophically failed causing the Explorer to leave the roadway ultimately striking some trees at the bottom of an embankment. (App. pp. 780-788 ) Angela and fourteen year old Justin Plyler were killed in the accident. Alania Plyler and Hannah Plyler were riding in the back seat and both sustained physical and psychological injury as a result of the collision and by witnessing the injuries to their mother and brother.
These cases were filed in the Hampton County Court of Common Pleas against Bridgestone Corporation, Bridgestone Firestone North American Tire, L.L.C., Ford Motor Company and Vintage Motors. The complaint alleges products liability claims against Bridgestone and Bridgestone Firestone for manufacturing and selling a defective tire. The complaint also alleges that the Explorer was defective in handling. By agreement all of the cases were consolidated for the purposes of discovery.
The failed tire was manufactured by Bridgestone Corporation at its Hofu Plant in Japan during the 25th week of 1996. As part of their investigation into the cause of the tire failure, the Respondents served discovery on Bridgestone to obtain information on the design and manufacturing process for the failed tire. Bridgestone objected to producing this information and moved for a protective order pursuant to Rule 26 SCRCP. Respondents moved to compel Petitioners to respond to their discovery rquest.
A hearing was held before the Honorable Carmen T. Mullen on January 30, 2007. Judge Mullen notified counsel on February 20, 2007, that she was granting the motion to compel. Bridgestone thereafter filed a motion to stay the order compelling discovery and moved to be allowed to depose the Respondents’ experts on the issue of the need of Respondents for the skim compound documents in the preparation of their case.
Judge Mullen granted Petitioner’s quest and Petitioner took the depositions of two of Respondents’ experts who had submitted affidavits in support of Respondents’ motion to compel. Petitioners did not depose a third expert who also gave an affidavit in support of the motion to compel. After receiving supplemental briefing, Judge Mullen ultimately entered a written order dated August 15, 2007, requiring Bridgestone to provide the information concerning the design and manufacture of the failed tire.
Bridgestone subsequently filed a motion to stay the trial court’s order and a petition for Writ of Certiorari. The trial court’s order was stayed with the consent of the Respondents awaiting this Court’s decision on the Petition for Writ of Certiorari which was granted on December 6, 2007.
It is undisputed that on July 16, 2005, the left rear tire on the 1999 Ford Explorer driven by Angela Plyler failed and that she lost control of the Explorer, left the roadway and struck trees before coming to rest. Alania and Hannah Plyler lost their mother and brother as a result of this collision in addition to sustaining severe personal injuries. The tire that failed was designed and manufactured by Respondent at its Hofu Plant in Japan. These basic facts are not in dispute.
The central issue in dispute between the Petitioner and Respondents is the cause of the tire failure. Was it due to a defect or was the failure caused by something beyond the control and responsibility of Bridgestone? Both in its answer and in response to specific questioning by the trial court during the discovery hearing, Bridgestone denied that the failed tire was defective. (App. p. 12 ) In light of this denial, the Respondents are required to prove that a defect exists in the failed tire. Product defects are generally viewed as: (1) manufacturing defects; (2) design defects; (3) warning defects. The Respondents have made allegations that the tire failure implicates all three defect categories. Respondents have sought through discovery and with the aide of technical experts to determine the true nature of the defect.
1. Tire defect and relevance of the skim compound formula.
In order to meet their burden of proof on the various theories of defect, the Respondents have sought to determine the root cause of the tire failure. In order to determine the root cause of the tire failure, Respondents hired an engineer skilled in failure analysis. Respondents hired Robert C. Ochs, P.E., P.C., to perform a forensic examination of the failed tire. Mr. Ochs is a professional engineer who worked for Michelin for 25 years. Mr. Ochs’ work included performing failure analysis of tires in defense of product liability litigation. (App. p. 810)
Mr. Ochs has determined that the tire failed as a result of a defect. In making this finding, Mr. Ochs ruled out the other potential causes of a tire failure such as impact damage, under inflation, and the other causes cited by Petitioner in its brief. Based on the analysis by Mr. Ochs, the Respondents have a strong basis to believe that the tire is defective and are not proceeding on a “fishing expedition” with regard to the discovery in this case.
While Mr. Ochs was able to determine that a defect caused the premature tire failure, he was unable based on information currently available to him to determine if the defect was a manufacturing or design defect. Mr. Ochs indicated that certain information from Bridgestone would be necessary in order to make this determination. He signed an affidavit to this effect in support of Respondents’ motion to compel. His affidavit is as follows:
I have been asked by the plaintiffs to examine the subject tire in an effort to determine why the tire failed. My initial evaluation of the tire reveals that the tire failed prematurely as a result of a defect in the tire. At this time I cannot state whether the defect is in the manufacture or design of the tire.
The plaintiffs have requested that I work together with James E. Duddey, Ph.D. and Richard J. Smythe, Ph.D. to determine if the failure was the result of a manufacturing defect or a design defect. In order to perform the specific work requested by the plaintiffs it will be necessary to compare the failed tire with its initial physical properties as designed by Bridgestone.
Because this failure involves a separation of the tread belt, it will be necessary to examine the skim compound formula to aid in determining the true nature of the defect. Once the skim compound used to manufacture the subject tire is analyzed, both for its intended physical properties and as compared to the central compound formula, I will then be able to render opinions on the true nature of the defect.
(App. p. 809)
The skim compound is the rubber used to make the steel belt package in a tire. “The steel belt skim stock … refers to a specifically formulated rubber compound calendared onto the steel cord to form the steel belts in a steel belted passenger or light truck tire.” (App. p. 191) “It is formulated to provide, among other things, adhesion between the rubber and steel cord, and between the belts and surrounding components.” (id.) If the skim compound rubber is not correctly formulated or is incorrectly mixed its ability to provide adhesion between the steel cord, belts and surrounding components may be compromised.
This point is underscored by the paper setting forth the findings of the National Highway Traffic Safety Administration concerning the Wilderness AT tire recall.
Fatigue crack initiation and propagation in cord-rubber composites and the potential for belt-edge separation are long-recognized and heavily-studied failure mechanisms in radial tires. The literature emphasizes the criticalimportance of the belt wedge in suppressing the initiation and growth of cracks in the belt edge area and the importance of using rubber that has good crack resistance to crack propagation in the belt skim coat and wedge compounds.
Engineering Analysis Report and Initial Decision Regarding Firestone Wilderness AT Tires, USDOT October 2001, p. 8
Belt edge separation is governed by two principle factors: (1) the resistance of the belt rubber to crack initiation and propagation; and (2) the forces driving the crack forward through the belt rubber. The crack growth characteristics of the belt rubber evolve over time from the effects of aging. There are many factors controlling this evolution, including operating temperature, oxygen content, compound type, usage conditions, and manufacturing variance (e.g., compounding and curing systems).
Id. at 7-8.
These statements by NHTSA are directly on point and demonstrate the relevance of the skim rubber compound to the issue of tread belt separation. In order to determine the cause of the tire failure, the experts need to examine the rubber compound and Respondents sought to obtain information from Petitioner so that a technical analysis could be made to determine the exact cause of the tire failure.
2. The Respondents’ document requests are specifically targeted to obtain information concerning the suspect component of the tire.
The failure in the Radial ATX occurred in the steel belts, which are made up of the steel cords and the rubber or skim rubber compound. Having identified the adhesion between the steel cords and the skim rubber compound as a likely cause of failure, the Respondents served discovery to obtain information about the steel cords and the skim rubber compound. The skim rubber compound used by Petitioner to manufacture the Radial ATX is identified as G200. The Respondents attempted to obtain information concerning the design of the Radial ATX and limited their inquiry to information directly related to the area where the tire failed. Listed below are examples of the information requested:
Plaintiffs’ First Request for Production
Request No. 45 – recipe or ingredients used to make the skim stock.
Request No. 52 – changes to the skim stock rubber.
Request No. 69 – developmental documents for the skim stock.
Request No. 77 – chemical composition of the belt wire.
Request No. 78 – testing of adhesion of the rubber to wire.
Request No. 80 – testing of skim rubber coverage on the wire.
Request No. 81 – chemicals used to promote adhesion of rubber to wire.
Request No. 88 – adhesion values for rubber to wire adhesion.
Request No. 89 – documents showing any tires with inadequate adhesion.
Plaintiffs’ Second Request for Production
Request No. 20 – Logs for deviations to the skim compound at the Hofu Plant.
Request No. 21 – Logs for deviations from the home office or central compound at the Hofu Plant.
Request No. 22 – accepted mixing deviations of the skim compound formula.
Request No. 23 – acceptable material substitutes.
Request No. 38 – design reviews for changes to the Radial ATX.
Request No. 42 – changes in antidegradents.
In response to each of these requests and numerous other requests, the Petitioner objected to producing the requested information based on a claim of trade secrets. It claims trade secret for not only the rubber recipe, but also for all testing of the performance of the recipe and any information pertaining to changes or deviations for the recipe. Under the claim of trade secret, the Petitioner has refused to provide the Respondents with any information concerning the design of the component of the tire which failed.
3. The Respondents need this information in order to pursue their products liability claims.
In order to recover under any of Respondents’ alleged products liability theories, they must show: (1) an injury caused by the tire; (2) the injury occurred because the tire was in a defective condition, unreasonably dangerous to the user; and (3) that the tire at the time of the accident was in essentially the same condition as when it left the hands of Petitioner. Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 462 S.E.2d 321, 326 (Ct. App. 1995). Of these three requirements, proof that the tire was in a defective condition is the element that poses the greatest challenge from an evidentiary perspective.
The mere fact that a product fails or malfunctions does not tend to prove that the product is defective. Id. Furthermore, the idea that a product may be made safer or stronger is not proof that it is defective. Claytor v. General Motors Corp., 277 S.C. 259, 286 S.E.2d 129 (1982).
Both manufacturing defect and design claims necessarily implicate the design of a product. “Manufacturing or production line defects result when the final product does not conform to design specifications.” Hubbard and Felix, The South Carolina Law of Torts (3rd Ed. 2004) p. 299. In contrast “the design defect impugns an entire line of the product” and “determining whether a product design is unreasonably dangerous presents a difficult task”. Id. at 300-301.
Part of the difficult task of proving a defect in the design comes from the need to offer proof of an alternative safer design. “[T]he existence of a safer alternative design is a crucial aspect of a product liability case in South Carolina” and “failure to provide such proof can doom a case as a matter of law”. Little v. Brown & Williamson Tobacco, Corp., 243 F. Supp.2d 480 (D.S.C. 2001). In order for the Respondents to challenge the design of the tire and offer alternative designs it is imperative that they be provided access to the intended design of the failed components.
Petitioner has argued that the Respondents can prove their case by doing physical testing of the failed tire to see if it has the intended physical characteristics. As an initial matter the Radial ATX is no longer in production and therefore there is no possibility that the failed tire can be compared to a new tire built from the same specifications. Even if possible, the comparison would be of little value given that the tire is now 11 years old and has undergone many changes due to use, oxidation and the catastrophic failure that caused the accident. Having access to the design information is absolutely necessary if the Respondents are to conduct a proper analysis into why the tire failed.
4. The Respondents have retained additional technical experts to help analyze the design of the tire components.
In addition to requesting specific information, the Respondents retained the services of James Duddey, Ph.D. who worked for Goodyear Tire and Rubber for 32 years. He has experience in rubber compounding and in the evaluation of belt separations in light truck passenger tires. (App. p. 319) He has written a chapter in the book “Rubber Compounding: Chemistry and Applications”. While at Goodyear, he received training in tire compounding and tire mechanics. (id.)
The Respondents also retained an analytical chemist to aid in their investigation of the tire failure. Richard Smythe, Ph.D. is an analytical chemist with Waters Forensic Engineering and was hired to aid in performing a root cause analysis of the failed tire. Dr. Smythe has experience analyzing failed rubber products and provided the court with a paper he authored on tire aging entitled “The Chemistry of Rubber Aging and Automotive Tire Degradation”. (App. p. 789)
Both Dr. Smythe and Dr. Duddey indicated to the court that access to the requested information was necessary to conduct a root cause analysis of the failed tire. Dr. Duddey testified as follows on this issue:
necessary in order for you to reach opinions regarding any specific material
that may or may not have an effect on what you saw with the tire, is it
necessary for you to have access to information regarding the materials that
went into the skim compound to do that?
|A.||In order to make any type of judgment at all, you need to know where you are starting from.|
Duddey Deposition Page 77, Line 18 – 25 (Exhibit “A”)
then do you also need to look at the manufacturing processes to see if that had
|A.||That’s the next level: Is there something that’s being introduced during the manufacturing of the rubber of the tire that’s causing the problem.|
Duddey Deposition Page 78, Line 7 – 11
|Q.||And in your opinion, is there any way for the Plaintiff to fully investigate the existence or nonexistence of a design defect in this tire related to the hardness and cracking that you saw in the tire without access to the information that we requested?|
|A.||The material and design go hand-in-hand. You could have good material and a poor design that is going to fail or you could go the other way and have a good design, good structure and the material fails. So you need to examine both paths.|
Duddey Deposition Page 80, Line 15 – 24
Dr. Smythe testified as follows:
order for you to render opinions that as an analytical chemist on any product
including a tire, is [sic] it a rubber compound, is it necessary for you to
know all of the ingredients that go into that polymer?
Smythe Deposition Page 29, Line 9 – 15 (Exhibit “B”)
were provided with the intended physical properties of what, in this case,
Bridgestone intended the physical properties of this tire to be when it was
manufactured – would you be able to aid, given the materials and knowledge
about the process by which the tire was manufactured, would you be able to aid
in determining why, assuming hypothetically, the tire did not live up to those
physical properties or did not experience the service life that was intended
for that tire? Would you be able to aid us in that through analytical
sir…That’s chemical analysis and that’s what I do and that’s what I contribute
to Dr. Duddey’s work and engineer Och’s work.
doing this is it imperative that you be provided access to the full array of
information concerning both the manufacturing process and the materials that
have gone into making this tire?
|A.||Yes, sir. I need both major components of – I need both major compositions of the components and I need the trace quantities of components of individual members that make up the tire, everything, because of the fact that if we are going to design an analysis, we need to have – we’ll reproduce the one that is going to stand up to scrutiny by the Court.|
Smythe Deposition Page 31, Line 10 – Page 32, Line 21
The trial court ultimately concluded that the information concerning the skim compound rubber used to manufacture the Radial ATX was relevant and necessary to Respondents’ claims and their ability to investigate and prove the cause of the tire failure.
The Petitioner in this case presents the threshold question of the standard to be applied in South Carolina courts for the discovery of trade secrets in products liability actions. In actions involving the misappropriation of trade secrets, it is clear that South Carolina Code Ann. § 39-8-10, et seq., controls. For other civil actions where discovery of trade secret information becomes an issue, the answer is not clear and the lower courts need the guidance of the Court for the standard to be used in deciding issues on the discovery of trade secrets. This issue is arising with increasing frequency in our courts.
The brief filed by Bridgestone assumes that the South Carolina Trade Secret Act is the controlling law without acknowledging that Rule 26 is the standard applied by the district courts in South Carolina and by most courts throughout the United States.
The trial court did not specifically rule on this issue, but instead made a factual determination that the Respondents were entitled to this information under either standard. The Respondents believe that the correct analysis for determining whether to allow discovery of trade secret information in all actions that do not involve misappropriation of trade secrets is made under Rule 26 SCRCP. If the Court determines that the Trade Secrets Act governs discovery in all actions, civil and criminal, the Respondents believe that the trial judge correctly held that they had met the burden of demonstrating substantial need for discovery of this information, and that they met the burden required for discovery under the Trade Secrets Act.
Standard of Review
The conduct of pretrial discovery rests within the sound discretion of the trial court. A matter within the discretion of the trial court will not be disturbed by the appellate courts absent an abuse of discretion. Law v. S.C. Dept. of Corrections, 368 S.C. 424, 629 S.E.2d 642 (2006). An abuse of discretion occurs when the trial court’s decision is based on an error of law or is without evidentiary support. Clark v. Cantrell, 339 S.C. 369, 529 S.E.2d 528 (2000).
In this proceeding the Petitioner challenges the trial court’s application of the law to the facts of this case in ordering discovery of the skim stock formula and related documents. The application of the South Carolina Trade Secrets Act to discovery in a personal injury products liability action is a novel question of law. “In a case raising a novel question of law, the Court is free to decide the question with no particular deference to the lower court.” Mims Amusement v. Law Enforcement Div., 366 S.C. 141, 621 S.E.2d 344, 346 (2005). However, the Court’s jurisdiction is limited to the correction of errors of law and the trial judge’s findings of fact cannot be disturbed unless unsupported by any evidence. Rose v. Beasley, 327 S.C. 197, 489 S.E.2d 625 (1997). Thus, the trial court’s factual determinations underlying the discoverability of the skim stock formula and entry of a protective order should not be overturned unless it is without evidentiary support.
I. IN CIVIL ACTIONS DISCOVERY NOT INVOLVING MISAPPROPRIATION OF TRADE SECRETS IS CONTROLLED BY RULE 26(C), AND NOT BY THE SOUTH CAROLINA TRADE SECRETS ACT.
For several reasons, Respondents contend that the South Carolina Trade Secrets Act does not apply to the discovery of trade secrets in actions other than actions brought under the Act claiming misappropriation of trade secrets. As an initial matter, the plain language of the Act limits its application to actions involving misappropriation. Second, to apply the Act as Petitioner has suggested has the effect of supplanting Rule 26 and thereby encroaching on the Court’s authority to regulate discovery.
A. The Clear and Unambiguous Language of the Trade Secrets Act Limits its Application to Actions Involving Misappropriation of Trade Secrets Located in South Carolina.
Despite the clear and unambiguous legislative declaration limiting the reach of the Trade Secrets Act to actions involving “misappropriation of a trade secret” or “protection from misappropriation”, Petitioner argues that the Act applies to any action where discovery of trade secret information is sought. The plain language of the Trade Secrets Act reveals that it is not applicable to a products liability action but is limited to actions for misappropriation of trade secrets. S.C. Code Ann. § 39-8-30 provides:
This chapter applies to any and all civil remedies which are based upon misappropriation of a trade secret or upon protection of a trade secret except as provided in Section 39-8-110(B) and (C).
Reference to S.C. Code Ann. § 39-8-110(B) and (C) further reveals the legislature’s intent to confine this Act to a claim of misappropriation.
(B)This chapter does not affect:
(1) Contractual remedies, whether or not based upon misappropriation of a trade secret or protection of a trade secret;
(2) the provisions of the South Carolina Tort Claims Act.
(C) Any and all other civil remedies that are not based upon misappropriation of a trade secret or upon protection against misappropriation of a trade secret are governed by rules of procedure, rules of evidence, regulations, and the common law applicable to the administrative law tribunal or court where the action is filed.
A review of the published decisions reveals that the South Carolina appellate courts have not had an opportunity to decide the application of the Trade Secrets Act to a products liability action. However, the federal district court in Greenville has addressed this issue in the context of a products liability case and concluded that the Act was not applicable where the action was not based on misappropriation. “By its own language, the South Carolina Trade Secrets Act does not apply to any action that is not based on misappropriation of a trade secret or protection against such a misappropriation of a trade secret.” Greigo v. Ford Motor Company, 19 F. Supp. 2d 531, 533 (D. S.C. 1998). “[T]he Trade Secrets Act covers only a narrow category of cases – those actions based on misappropriation of trade secrets.” Id. This case does not involve claims of misappropriation but is, instead, a tort action alleging products liability.
Notwithstanding the limitation of the Trade Secrets Act to actions involving misappropriation, Petitioner argues that the Act applies to discovery of trade secrets in all civil actions based on the language in S.C. Code Ann. § 39-8-60(B).
In any civil action where discovery is sought of information designated by its holder as a trade secret, before ordering discovery a court shall first determine whether there is a substantial need by the party seeking discovery for the information.
The Respondents acknowledge that this language can be interpreted as a broad statement of intent to apply at all civil actions. However, the Trade Secrets Act must be read as a whole and in doing so it is clear that the legislature intended to confine the Act to actions involving misappropriation. “Although § 39-8-60(B) appears to establish a more stringent standard for the production of trade secrets, S.C. Code Ann. § 39-8-110(C) defines the scope of the South Carolina Trade Secrets Act.” Greigo, at 533.
The Petitioner’s interpretation of § 39-8-60(B) renders the language of § 39-8-110(C) meaningless. Likewise, Rule 26(c) of the South Carolina Rules of Civil Procedure and Federal Rules of Civil Procedure would be supplanted by the Trade Secrets Act as relates to the rules applicability to the discovery of trade secrets. Such a broad application of the Trade Secrets Act is unwarranted and was not intended by the legislature when the Act is read as whole.
B. The History of the Trade Secrets Act Confirms that it was not Intended to Apply to Products Liability Actions.
The predecessor to the current version of the South Carolina Trade Secrets Act was enacted in 1992 when the Legislature adopted the Uniform Trade Secrets Act, 1992 Act No. 437. The Uniform Act codified the basic principles of trade secret protection and therein provided South Carolina with needed uniform trade secret protection. See Prefatory Note to Act 437.
Section 39-8-7 of the Uniform Act made it clear that it was not intended to affect other actions not based on misappropriation of trade secrets.
Section 39-8-7(B). This chapter does not affect:
(2) other civil remedies that are not based upon misappropriation of trade secret, including, but not limited to, any civil action brought in the state or federal courts alleging products liability.
In 1997 the Legislature revised the Uniform Act and in doing so changed its name to the South Carolina Trade Secrets Act. Like the Uniform Act, the newly enacted version retained clarifying language indicating the Legislature’s intent that the Trade Secrets Act not affect other areas of law not involving misappropriation of trade secrets. As previously cited, § 39-8-110 expresses the Legislature’s intent to limit the Act.
(c) Any and all other civil remedies that are not based upon misappropriation of a trade secret or upon protection against misappropriation of a trade secret are governed by rules of procedure, rules of evidence, regulations and the common law applicable to the administrative law tribunal or court where the actions is filed.
This language, like that of § 39-8-7 of the Uniform Act, clearly expresses the Legislature’s intent to limit the affect of the Trade Secrets Act to actions involving misappropriation. An action alleging products liability is “governed by rules of procedure … applicable to the court where the action is filed.” The rules of procedure applicable to the present action are the South Carolina Rules of Civil Procedure and specifically Rule 26.
To read the Trade Secrets Act as governing procedure in a products liability action is inconsistent with the plain language of the Act and the history of the Act, which when initially enacted, specifically recognized products liability actions as being unaffected.
At least 45 states have adopted some form of the Uniform Trade Secrets Act with most of the enactments containing some provision defining the act’s effect on other laws. See 50 State Statutory Surveys Intellectual Property Trademarks and Trade Secrets , Thompson West 2007. Consistently the states adopting the uniform act have provided that it was not intended to affect other remedies not involving misappropriation of trade secrets. (Id.) Comparing the uniform act and various versions enacted in other states to the South Carolina Trade Secrets Act reveals that the South Carolina version is much more specific than any other state with regard to its preservation of the “rules of procedure” and “rules of evidence” applicable to the “ court where the action is filed”.
It is noteworthy that in the case of Bridgestone v. Mayberry, 878 N.E.2d 189 (Ind. 2007), which is attached as an exhibit to the Petitioner’s brief, the Indiana Supreme Court relied on its version of Rule 26 to analyze the discoverability of trade secrets in that state despite the adoption of the Uniform Trade Secrets Act. The Court wrote that “the application of Rule 26 to trade secrets should be informed by Indiana’s enactment of the Uniform Trade Secrets Act (UTSA), which provides states with a common legal framework for protecting trade secrets from misappropriation.” Id. at 194. The Court found the act instructive of the legislature’s intent to apply trade secret law uniformly with other states and therein adopted the Rule 26 analysis for discovery of trade secrets in order to be consistent with other courts throughout the country.
Despite the seemingly clear provisions limiting the effect of Trade Secrets Act to actions involving misappropriation, the Petitioner will likely argue that it applies to discovery in all civil actions based on § 39-8-60(B) which provides:
In any civil action where discovery is sought of information designated by its holder as a trade secret, before ordering discovery a court shall first determine whether there is a substantial need by the party seeking discovery for the information.
The Petitioner reads this language broadly to supplant the Rules of Civil Procedure with regard to discovery of information where there is a claim of trade secret. This interpretation would have merit but for §§ 39-8-30(E) and 39-8-110(C) which specifically limit the chapter to actions involving misappropriation and state that the applicable rules of procedure for the forum governs all other actions. If these limiting provisions are to have any meaning, then Petitioner’s interpretation of the Act must fail.
A more consistent and logical interpretation of § 39-8-60 recognizes that this section sets forth the procedure for discovery of trade secret information in civil actions for misappropriation brought under the Act. Likewise, § 39-8-100 sets forth the procedure where discovery is sought of a trade secret in criminal proceedings for misappropriation. Because the 1997 version of the Trade Secrets Act contains both civil and criminal provisions for misappropriation of trade secrets, the legislature saw fit to address the discovery and use of trade secrets in those actions in different manners.
In a civil action for misappropriation, the Act requires that a factual predicate for or against liability be pled with particularity. S.C. Code Ann. § 39-8-60 (B)(1). Surely the “liability” reference in this section is liability under the Trade Secrets Act. Petitioner interprets the pleading requirement to require a party to any civil action to include in the initial complaint allegations regarding discovery. This interpretation is wrong for two basic reasons.
First, the requirement is to plead a factual predicate for liability – not for discovery. The Petitioner ignores this plain language in its effort to stretch the pleading requirement to require prospective pleadings of discovery into the party’s complaint. The Act does not say nor require Respondents to plead their entitlement to disccovery.
The second reason that Petitioner’s reading of § 39-8-60(B) is untenable is that such an interpretation creates an unfair and impossible obstacle for a party seeking discovery in a products liability or other civil action not directly involving trade secrets. There is no practical way for a party to anticipate in advance that the opposing party will make a claim of trade secret in response to a discovery request. Petitioner has interposed an objection based on trade secret to 39 of the discovery requests propounded by the Respondents. To require a plaintiff to plead with particularity in her initial complaint the need for these discovery materials creates a near impossible obstacle to obtaining discovery of relevant information. This was clearly not the legislative intent and is further revealing of the absurd results that will accrue from interpreting the Trade Secrets Act to apply to discovery in all civil actions.
C. The South Carolina Trade Secrets Act is Inapplicable Because the Trade Secret Information at Issue is in Japan, not South Carolina.
Even if the Petitioner was correct in its argument that § 39-8-60(B) applies to discovery to a products liability action involving the discovery of trade secrets, the Act is limited to trade secrets physically present in South Carolina. Section 39-8-60(J) provides:
This section applies to any civil action brought within or without this state where discovery is sought of trade secret information present in this state
Subsection (J) clearly limits the application of § 39-8-60 to cases where the trade secret information is located within South Carolina. This limitation is consistent with the pro-business intent of the Act which was enacted to protect the trade secrets of businesses locating in South Carolina. There is no logical rational for the legislature to enact legislation that would provide greater protection for trade secrets outside of South Carolina than provided by states where the trade secret is located.
The trade secret at issue in this dispute involves a tire that was manufactured in Japan. Because the information at issue is not “present” in South Carolina, the Petitioner cannot claim the protections of Section 39-8-60(B).
D. The Petitioner’s Interpretation of the Trade Secrets Act Conflicts with the South Carolina Rules of Civil Procedure.
Application of the Trade Secrets Act beyond actions for misappropriation has the effect of displacing Rule 26 SCRCP and creates a new pleading requirement for discovery that is not contained in the Rules of Civil Procedure. To legislatively supplant the Rules of Civil Procedure in such a manner encroaches on this Court’s constitutional and statutory authority to establish rules of practice and procedure for the courts of this state. See Art. V, § 4 (Supreme Court shall make rules governing practice and procedure in all such courts.); S.C. Code Ann. § 14-3-640 (The Court may establish rules to facilitate the work of the court.)
This Court should not adopt an interpretation of the Trade Secrets Act that will clearly conflict with the well established rules of practice and procedure. See Baggerly v. CSX Transportation, Inc., 370 S.C. 362, 635 S.E.2d 97 (2006)(Refusal to adopt an interpretation of engineer licensing statute that limited Rule 702 SCRE.) This is especially true when the statute can be interpreted in a manner that effectuates the legislature’s intent to provide a uniform set of laws governing trade secrets without creating conflict and uncertainty in actions not involving misappropriation of trade secrets.
II. ASSUMING THAT THE TRADE SECRETS ACT IS APPLICABLE, THE RESPONDENTS HAVE MADE THE REQUISITE SHOWING OF SUBSTANTIAL NEED FOR DISCOVERY OF TRADE SECRET INFORMATION.
The trial court correctly found that the Respondents had met the burden of showing substantial need for the discovery of the trade secret skim compound formula. Section 39-8-60(B) provides:
In any civil action where discovery is sought of information designated by its holder as a trade secret, before ordering discovery a court shall first determine whether there is substantial need by the party seeking discovery for the information.
Much like Rule 26(c)(7) which requires a showing of relevance and necessity to discover trade secret information, Section 39-8-60(B) requires a greater showing than the general relevance standard necessary to obtain discovery of non-trade secret information. The statute requires the trial court to make a factual determination as to whether substantial need exists prior to ordering production of the trade secret information.
In this case the trial court performed the required statutory analysis and considered each of the criteria designated therein to determine the existence of substantial need. The Petitioner has failed to demonstrate that the trial court abused its discretion in finding that substantial need existed and completely ignored the critical fact that the Respondents cannot prove their design defect claims without access to the skim compound formula. The inability to obtain evidence necessary to determine whether a design defect exists should satisfy the substantial need requirement of § 39-8-60(B) without any need to look further. Nonetheless a brief analysis of the facts supporting the trial court’s conclusion clearly demonstrates that there was evidentiary support for the decision to allow discovery of the trade secret information and therefore no abuse of discretion.
1. The Respondents pled the factual predicate for liability required by the act.
The trial court found the Respondents had satisfied the factual predicate for liability by pleading facts sufficient to support the products liability causes of action related to the failed tire. The Respondents plead specific facts pertaining to the accident, their resulting damages and the conduct of Petitioner that caused the accident and injuries. (App. pp. 23-54)
The Petitioner argues that the allegations in the complaint are not particularly pled with regard to the skim compound formula and therefore inadequate to satisfy the criteria that the party seeking discovery, plead a factual predicate to liability. However, the statute has no requirement that documents sought in discovery be identified in the complaint and Petitioners attempt to read such a requirement into the statute is contrary to any logical reading of § 39-8-60(B) (1).
Instead, the statute only requires pleading of a factual predicate for liability. The complaints filed by Respondents undoubtedly meet this requirement as detailed in the trial court’s order.
2. The information sought is directly relevant to the allegations pled establishing a predicate for liability.
Petitioners do not argue that the skim compound formula is not directly relevant to the design defect. Unless access is given to the actual design there is no legally acceptable method of proving the existence of a defect. Knowing how and from what materials the tire was made is an absolute prerequisite to Respondents’ efforts to demonstrate an improper design. Changes based on cost reduction or inadequate testing are also relevant to punitive damages. The relevance of this information is incontrovertible and the trial court’s finding of relevance is supported by the evidence.
3. The Respondents will be substantially prejudiced without access to the information.
Without access to information concerning the materials and methods used to manufacture the tire there is no way for the Respondents to attempt to prove their design defect claim. Their claim that the tire prematurely aged due to a failure to use proper materials in the design of the tire to retard the degradation process becomes impossible to prove without knowing the composition of the skim stock.
In support of their position that the skim compound formula was necessary to aid in proving the case against Petitioner, the Respondents presented evidence from three expert witnesses on this issue. The trial judge cited to the testimony of Respondents’ experts in support of her factual finding that the Respondents would suffer substantial prejudice if denied access to the skim compound documents. (App. p. 8 – 11)
Contrary to the assertions made by Petitioner, the Respondents have substantial need for the skim compound and related documents. The trial court had very clear evidence that supported its finding of need by the Respondents for these materials.
It is obvious that without these materials Respondents ability to pursue a design defect claim will be foreclosed. The Petitioner will know the design and the Respondent and the Court will be not. The Petitioner will contend that the design is not defective, and Respondent will not have the information to test this assertion. A refusal to provide access to this highly relevant information will be tantamount to a partial grant of summary judgment restricting the Respondents to manufacturing defect claims.
4. A good faith basis exist for believing that testimony or evidence derived from the trade secret information will be admissible at trial.
As previously stated, the information ordered by the trial court is crucial to proof of Respondents’ design defect claims. It goes without saying that evidence of deficiencies in the tire materials or building process will be admissible at trial. The Petitioner argues that any evidence derived from an examination of the skim compound formula will be inadmissible. As the trial court correctly recognized, the admissibility of evidence cannot be judged at this stage of the litigation.
This subsection of the Trade Secrets Act does not require the trial court to rule on the admissibility of evidence prior to ordering discovery. It instead requires a determination that a good faith basis exists to support a belief that disclosure would lead to admissible evidence. Clearly the design of the product at issue in a products liability case is likely to be admissible either in support of a claim that the product is defective or in defense of the claim.
III. UNDER THE APPLICABLE STANDARD FOR THE PRODUCTION OF TRADE SECRETS SET FORTH BY RULE 26(c)(7), SCRCP, THE RESPONDENTS HAVE ESTABLISHED BOTH RELEVANCE AND NECESSITY TO WARRANT THE PRODUCTION OF THE SKIM-STOCK FORMULA.
Because the South Carolina Trade Secrets Act is inapplicable to this case, the correct analysis in determining whether Petitioner’s skim-stock formula is discoverable should be made pursuant to Rule 26(c)(7) of the South Carolina Rules of Civil Procedure. Rule 26(c)(7), SCRCP, in pertinent part, states as follows:
(c) Protective Orders. Upon motion by a party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending… may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden by expense, including one or more of the following:
* * *
(7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way… 
It is well settled that there is no absolute privilege to protect trade secrets from disclosure during the discovery process. Ex Parte Sealed Air Corp., 220 F.R.D. 452, 70 U.S.P.Q.2d 1575 (D.S.C. 2004); citing, Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1185 (D.S.C. 1974). As the United States Supreme Court recognized in Federal Open Market Committee of the Federal Reserve System v. Merrill, 442 U.S 340, 99 S. Ct. 2800, 61 L.Ed. 587 (1979), “[t]he courts have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure. Frequently they have been afforded a limited protection.” Id. at 442 U.S. 362. Moreover, the Supreme Court recognized that “orders forbidding any disclosure of trade secrets or confidential information are rare. More commonly, the trial court will enter a protective order restricting disclosure to counsel.” Id.; accord, MDK, Incorporated v. Mike’s Train House, Inc., 27 F.3d 116, 29 Fed. R. Serv. 3d 1472 (4th Cir. 1994) (noting that trade secrets have “widely been held to be discoverable” upon appropriate findings and with an appropriate protective order).
Rather, discovery of confidential information and trade secrets “is virtually always ordered once the movant has established that the secret information is relevant and necessary.” Sealed Air Corp. at 453; Coca-Cola Bottling Co. of Shreveport, Inc. v. Coca-Cola Co., 107 F.R.D. 288, 292 (D.Del. 1985). “When disclosure of a trade secret is sought during discovery, the governing relevance standard that the movant must satisfy is the broad relevance standard applicable to pre-trial discovery, i.e., the movant must show the material sought is relevant to the subject matter of the lawsuit.” Id. at 293; Sealed Air Corp., supra; 8 C. Wright & Miller, Federal Practice & Procedure: Civil § 2043, at 301 (1970). Once the party seeking discovery of the trade secret establishes that the information sought is relevant to the subject matter of the litigation, the party must then show that the information is necessary to the action. Sealed Air Corp., supra; In re Remington Arms Company, Inc., 952 F.2d 1029, 22 U.S.P.Q.2d 1063 (8th Cir. 1991). “The level of necessity that must be shown is that the information must be necessary for the movant to prepare its case for trial, which includes proving its theories and rebutting the opponent’s theories.” Coca-Cola Bottling Co. of Shreveport, Inc., supra. (Emphasis added).
Applying these standards to this case, it is clear that the Respondents have met the burden of showing that the Petitioner’s skim-stock formula is relevant and necessary to their case. The Respondents have claims against the Petitioner for negligence, breach of warranty and strict liability. Specifically, Respondents allege defects in both the design and the manufacture of the subject tire which led to the catastrophic failure of the tire. It follows from these allegations that the composition of the subject tire, which includes the skim-stock formula, is clearly relevant to the subject matter of this products liability case.
Moreover, through the testimony of their expert witnesses, the Respondents have provided specific evidentiary support which establishes both the relevance and necessity of the skim-stock formula to this case. Respondents produced evidence from three expert witnesses on the need for the skim stock formula and related documents: Robert Ochs, P.E., a forensic tire failure analyst; Richard Smythe, an analytical chemist; and, James Duddey, Ph.D., a tire compounding expert formerly employed by Goodyear. Each of these experts opines that disclosure of the skim-stock formula is necessary and essential to their analysis of the alleged defective design and manufacturing of the tire. Based upon the experts’ need for this information, the discovery sought by the Respondents goes to the heart of their case. The Respondents must be able to demonstrate to a jury how and why the tire failed and what design and manufacturing alternatives existed which were not employed in the design and manufacture of the subject tire. The ability of the Respondents to fully learn and investigate the composition of the tire at issue – specifically including the skim-stock formula – is indispensable to the Respondents’ products liability cause of action and the specific allegations of design defect. The denial of this information would severely prejudice the Respondents by impeding, or worse, completely foreclosing, their ability to prove the elements of a design defect case. Because the information sought is “necessary to prepare [their] case for trial, which includes proving [their theory of liability],” the Respondents met the burden and the trial court correctly ordered the production of the skim stock formula. Id.
Petitioner argues that because the Respondents’ expert has already stated that the tire was defective, access to the design information is unnecessary. This position was rejected by the New York Supreme Court in a similar case. While it is merely persuasive authority, the decision of Mann v. Cooper Tire Company, 816 N.Y.S.2d 45 (N.Y. 2006) is instructive on the issues now before the Court. Like this case, Mann involved a personal injury action allegedly caused by a defective tire and there, the plaintiff sued Cooper Tire under negligence, breach of warranty, and strict liability theories. The relevant discovery issue before the New York Supreme Court was whether the plaintiff was entitled to the production of Cooper Tire’s formula and/or compound ingredients of the tire at issue. Although the New York Supreme Court did not hold the requested information to be a trade secret, the Court nevertheless fully addressed the merits of plaintiff’s relevance and necessity argument. The Court held that Cooper Tire’s compound ingredients for the tire were indispensable to the plaintiff’s cause of action under the products liability theories of defective design. Id. at 53-54. In holding that the information sought was sufficiently relevant and necessary to warrant disclosure even if the ingredients were a trade secret, the Court explained:
Even if Cooper Tire had met its burden to show that the ingredients are a trade secret, it would be unavailing since there is merit in the plaintiffs’ assertion that disclosure of the ingredients and alternative tire designs is indispensable to their products liability lawsuit. Cooper Tire argues that the plaintiffs do not need the information about the formula or the ingredients since they claim that the plaintiffs’ expert has already examined the tire and found it to be defective without that information.
* * *
… Further [the plaintiffs] assert that the information they seek about the ingredients is indispensable to their cause of action. The plaintiffs correctly assert that they “must be able to demonstrate to a jury how and why the tire failed and what design and manufacturing alternatives existed which were not employed in the design and manufacture of the subject tire.
The Respondents in this case are in the same position and merely seek to have access to discovery sufficient to all them to fully investigate their product defect claim.
Based on the foregoing analysis, the trial court’s order compelling disclosure of the skim stock formula subject to the protective order is fully warranted. The Respondents set forth competent evidence to show that the trade secret is relevant to the subject matter of this products liability case and that the information is necessary to prove her case. In light of the applicable standard enunciated in Rule 26(c)(7), SCRCP, the denial this information greatly prejudices Respondents’ ability to prosecute their theory of design defect, and the nature of this harm greatly outweighs the potential harm to the Petitioner, whose trade secret is given security from disclosure under the terms of the trial court’s protective order. As Judge Learned Hand stated in one of the earliest trade secret cases:
It is true that the result may be to compel the defendant to disclose [trade secrets], and that that may damage the defendant… That is, however, an inevitable incident to any inquiry in such a case; unless the defendant may be made to answer, the plaintiff is deprived of its right to learn whether the defendant has done it a wrong.
Grasselli Chemical Corp. v. National Aniline & Chemical Co., 282 Fed 379, 381 (S.D. N.Y. 1920). Having shown both relevance and necessity to the trial court, the disclosure is warranted and the threat of disclosure is properly managed by the restrictions of the trial court’s protective order.
IV. THE PETITIONER HAS ATTEMPTED TO PREVENT RESPONDENTS ACCESS TO RELEVANT AND NECESSARY INFORMATION BY MAKING ARGUMENTS THAT MISCHARACTERIZE THE RECORD.
Throughout this discovery dispute, which has lasted more than a year, the Petitioner has taken the position that its tire is not defective and that Respondents are not entitled to challenge its position through access to the design information for the Radial ATX. Rather than having the trial court decide what is relevant in discovery the Petitioner has made that determination and further defined in limited terms how the Respondents may go about challenging the performance of the failed tire. Petitioner’s efforts to prevent access to relevant information have resulted in it making numerous statements concerning the record and testimony of experts retained by the Respondents that are inaccurate.
At Petitioner’s request, Judge Mullen allowed the depositions of all three of Respondents’ experts to be deposed on the issue of the “need for the skim compound formula”. Petitioner’s request to depose Dr. Duddey was based on a misrepresentation to the trial court that it had never deposed Dr. Duddey and that it was therefore unfamiliar with Dr. Duddey. In reality the Petitioner was a party to the case of Rodriguez v. Bridgestone Firestone North American Tire, LLC and Bridgestone Corporation, Circuit Court, Hillsborough County, Florida, Civil Division Case Number 01-4696 Division F. Bridgestone was a party to that case represented by the law firm of Squire, Sanders, and Dempsey, which is the same firm providing representation in this case. Dr. Duddey was asked questions concerning the need for skim compound discovery in Rodriguez. He was questioned concerning his testimony in Rodriguez in the present case. Counsel for Petitioner had a copy of the Rodriquez deposition with him at Dr. Duddey’s in this case. (App. pp. 464, 484) When this misrepresentation was brought to the attention of the trial court, Petitioner attempted to qualify its statement by stating that its attorneys did not ask questions at that deposition. However, that is a totally different position than the one which was represented to the trial court as a basis for taking his deposition. The Petitioner argued to the trial court that the Petitioner was unfamiliar with Dr. Duddey.
Petitioner did depose Dr. Duddey and Dr. Smythe. What is interesting is despite the trial court’s grant of Petitioner’s request to depose Respondents’ experts on the need for the skim compound formula, counsel for Petitioner never asked either of these witnesses why this information was needed. Even more amazing is that Petitioner chose not to depose the one witness, Mr. Ochs, who initially found the defect and asked for further investigation into the skim compound.
Rather than asking the ultimate question of why the skim compound was needed, Petitioner chose instead to attempt to depose the witnesses on ultimate opinions or issues about which they were not prepared to testify or which were totally irrelevant to the analysis of the failed tire. The Petitioner then submitted excerpts from these depositions and repeatedly mischaracterized and misrepresented the testimony in its effort to prevent the Respondents from having access to relevant and necessary information (App. pp. 255-317; pp. 443-456; pp. 728-729)
The Petitioner’s pattern of making misleading arguments concerning this issue and the record has continued and form a large part of the argument contained in Petitioner’s brief. Because these arguments do not fairly represent the record, the Respondents have attempted to provide a comparison of the Petitioner’s arguments to the actual record. The attacks on Respondents’ experts appear to be nothing more than an effort to divert attention from the issues of relevance and need.
Argument at Petitioner’s Brief page 12
“Indeed Respondent’s expert, Dr. Duddey, freely admits he can offer no meaningful analysis of Bridgestone’s trade secret formula. Specifically, Dr. Duddey testified that he would like access to the trade secret formula so that he could compare it to generic formulas that appear in the trade and advertising literature, which he terms “middle of the road” formulas, but he admittedly does not know what “middle of the road” means, or its significance. The most he could offer in terms of a comparison would amount to “an act of faith,” a “guess.”
Question: You have also told us that you haven’t had access to the skim compound formulas of other tire companies, correct?
Answer: Other than I had access to the Goodyear formulations.
Question: I mean other than Goodyear?
Answer: And other than Goodyear I’ve had access to some of the Firestone formulations.
Question: Let me ask the question this way not having had access to a full range of tire company formulas and not having been personally involved in the development of any of these generic or standard formulas you don’t have personal knowledge as to how middle of the road those are, do you?
Answer: I can’t say no.
Question: So you couldn’t personally say if it really is near the middle of what the various tire companies do, correct?
Answer: I can’t say that, no I don’t have any way of making that judgment per se, other than sort of an act of faith.
Question: It is sort of a guess about how it should work, correct?
Question: Do you have copies of some of those formulas?
Answer: I have a substantial number of formulations.
(App. pp. 478-479)
Nowhere in this testimony does Dr. Duddey “freely admit” he can offer no meaningful analysis of Petitioner’s trade secret formula. To be sure, the question cited to by Petitioner involved a comparison of tire company formulas that Dr. Duddey had never seen to standard formulations to see if they were “middle of the road”. Obviously, if Dr. Duddey had never seen tire company formulations other than Firestone and Goodyear it would be impossible for him to make such a comparison. His statement that he had no way of making that judgment is accurate. However, nowhere does Dr. Duddey say what Petitioner has represented to this Court nor is there a good faith basis for making such an argument.
Argument at Petitioner’s Brief page 14
“In fact, after examining the tire, Dr. Duddey conceded that he found no evidence leading him to believe there was any problem with the trade secret formula or “recipe” itself. Further, even at the time of his deposition, Dr. Duddey was unable to identify any constituent of the recipe that if he had any reason to believe was deficient.”
Question: At that time did you have any impression as to whether there were particular aspects of the compound formula that ought to be explored?
Answer: At that point, no.
Question: Has that changed since that time?
Answer: Not that -- I can’t begin to draw any conclusion without seeing the formulations and making a judgment.
Question: Based on your physical inspection of the tire you didn’t see anything that would lead you to believe there was any particular constituent in the compound formula that was a particular problem in this tire, did you?
Answer: There is no way of physically looking at the failed tire and the surfaces involved to make any kind of conclusion in that regard.
(App. p. 466)
Question: And even after looking at the tire, you haven’t come to the conclusion that there is any particular aspect of the skim stock formula that is suspect, correct?
Answer: I don’t know that until I have a chance to examine the formulation.
Question: My point at this point is you haven’t narrowed down any particular aspect that you think might be an issue here.
Answer: Not at all.
(App. p. 468)
Petitioner’s argument misstates Dr. Duddey’s testimony. Nowhere does Dr. Duddey concede that he had found no evidence leading him to believe that there was any problem with the compound component. Instead he indicated that he could not make any judgment about a particular constituent of the skim stock formula until he had reviewed the entire formulation. Petitioner asked the question qualified by the term “particular constituent” and then argues to this Court and the Trial Court that Dr. Duddey was unable to find any evidence leading him to believe that there was a problem with the skim compound.
The Petitioner completely ignores Dr. Duddey’s testimony concerning his inspection of the failed tire. Dr. Duddey testified that he examined the tire and found that the belts had been loose for a long time and had been abrading and the two surfaces were polished. (App. p. 465) The polishing was between both the top belt and the bottom belt. (id.) His examination also found that the rubber compound was much harder than would typically be expected from a belt compound. (id.) Dr. Duddey concluded that in order to make a judgment as what may be occurring, that one needed to look at the formulations. (App. p. 466)
Argument Petitioner’s Brief page 14
“Contrary to the statement in paragraph 9 of his own affidavit, Dr. Duddey has never been provided access to formulas from other companies, such as Cooper, Pirelli, or Michelin and is not in possession of any tire companies belt skim compound formula which he might compare the Bridgestone trade secret formula at issue.”
Paragraph 9 of Dr. Duddey’s affidavit reads as follows: “I have been provided access to confidential documents including skim stock formulations in other cases and have never disclosed the information other than was provided in the governing protective order.” (App. p. 816)
Dr. Duddey never stated that he had been provided formulas from Cooper, Pirelli or Michelin. As he testified in his deposition he had been provided access to Goodyear’s skim compound formula and the Firestone’s skim compound formula. This testimony is set forth above in response to one of the arguments by Petitioner. To suggest that Dr. Duddey was untruthful in his affidavit in light of his testimony which actually confirms his statement concerning access to other formulations goes beyond the bounds of advocacy and is a clear misrepresentation.
Argument Petitioner’s brief page 14
“In fact, he has never been involved in any kind of evaluation per se in belt skim stock compounds.”
Question: So in your thirty something years at Goodyear and your now three years as a consultant, you have never conducted or coordinated the evaluation of any skim stock formula?
Answer: I think I would like to define the term evaluation. If you mean experimental evaluation, no.
Question: Have you ever been responsible for evaluating a skim stock formula and then rendering an opinion or judgment for someone to rely on as to whether that was or was not a proper formula?
Answer: My evaluation has only been compared to what the general knowledge of a skim stock formulation is, particularly in the supply literature or even the technical literature.
Question: But I ask you: have you ever been responsible for conducting an evaluation and rendering an opinion as whether a skim stock formula was or was not appropriate. Has that ever been apart of the work you’ve done.
Answer: I am not comfortable to where you are going.
Question: So you can’t answer that question as posed?
Answer: As I said, I have not conducted programs in the laboratory or in tires or anything like that. I’ve been asked to look at formulations comparing to what I know as a general practice in a technical field and making a judgment of a formulation or against what is generally known as a practice.
(App. pp. 469-470)
Yet again, Petitioner is mischaracterizing Dr. Duddey’s testimony. Dr. Duddey specifically qualified his statement by indicating that he had not been involved in any type of experimental analysis of a skim compound. He clearly testified that he had been involved in evaluating skim compounds in light of supplier technical specifications, his general knowledge of compounding and published literature.
Argument Petitioner’s brief page 14
“Because he can identify no problems – or even suggest what a “problem” might entail – the most Dr. Duddey is prepared to do in this case is compare the trade secret formula with generic compound formulas found in the literature.”
Question: How about the level of antioxidants “what kind, if you had that in front of you, what kind of analytical techniques would you feel you needed to conduct based on that”?
Answer: I would say that the level and type of antioxidants has been extensively published in the literature and basically there, if I saw a significant difference.
Question: Okay. So again, the only analytical technique you would feel necessary would be to compare it to the public’s literature?
Answer: I would say yes.
(App. p. 477)
The testimony quoted above is what Petitioner cites in its brief as indicating that the only technique Dr. Duddey is prepared to do is compare the trade secret formula with a generic compound. This testimony is referring to antidegradents which are a portion of the compound formula. Again Petitioner has completely mischaracterized Dr. Duddey’s testimony in this argument.
Argument Petitioner’s Brief page 15
“Even then, Dr. Duddey would be unable to conduct any meaningful comparison to any degree of engineering certainty (as opposed to a mere guess)”.
Nowhere in his testimony did Dr. Duddey state that he would be unable to perform any meaningful comparison or that his work on this case would be a mere guess. The Petitioner takes the word “guess” from, as discussed above, an area where counsel is questioning Dr. Duddey about his ability to judge compound formulas that he has never seen.
Argument Petitioner’s brief page 19
“Further, his testimony indicates that he has no interest in, much less a substantial need for, discovering or learning Bridgestone’s entire trade secret formula.”
The Petitioner does not cite to where Dr. Duddey indicated that he had no interest in learning the entire formula. This is because Dr. Duddey never said that and in fact his testimony was exactly the opposite.
Argument Petitioner’s brief page 19
“When pressed to identify with specificity what he would like to analyze, Dr. Duddey stated that he would only want to look at three aspects of the formula: a. the carbon black; b. (the resin/curative system); c. (the antidegradant package).”
While Dr. Duddey did indicate that these would be three areas of interest he never indicated that he could do his work by only looking at the levels of these three components of the compound formula. He specifically indicated that he would need to know all of the materials in order to make any judgment about the efficacy of the compound formula. To say that Dr. Duddey testified that he would only want to look at three aspects of the formula is an inaccurate statement. All Dr. Duddey indicated was that these would be the areas he was most interested in to begin his analysis.
Argument Petitioner’s Brief page 19
“Dr. Duddey also admitted that he does not know which grades of carbon black are appropriate for use in belts”.
Question: Is there a range of the types or grades of carbon black that maybe appropriate or acceptable for skim stock or the tire like the one in question?
Answer: There are quite a number of grades of carbon black.
Question: Which one in your opinion would be appropriate or acceptable?
Answer: Generally, and to get one of areas of carbon black selection become particularly important is in tear strength. One would want to choose a carbon black that that had significant structure.
Question: Which grades are appropriate in your view?
Answer: I think, and there are different classifications, but, I think generally in the range of N330 type carbon black.
Question: Dr Duddey, is it fair to say that you don’t have experience in the boundaries of which carbon blacks are or not appropriate in skim stock for the passenger and light truck tires?
Answer: I would say that on a general basis I have knowledge from when you learn the fundamentals of compounding and what it takes to get to specific properties, I have knowledge of where one needs to be. As far as where a specific carbon black might take you, how much you can live with, I cannot make a judgment at this point.
(App. p. 43)
Clearly Dr. Duddey’s testimony is at complete odds with the statement made in Petitioner’s Brief.
Argument Petitioner’s Brief page 19
“With respect to the resin system, Dr. Duddey repeatedly testified he has never involved in the evaluation of those aspects of a compound formula and plainly lacks the expertise to offer a legitimate analysis of that issue”.
Question: How about the resin system? - - You said the resin system and curatives. What analytical techniques would you feel you would need to apply to that if you were provided with the formula for that?
Answer: First of all, there are at least several different types of resin systems and one could be using the second aspect as the curative. The resin system, the curative that is used to cure up that resin system.
Question: Let’s talk about the types first. Let’s break this into two. When we talk about the types is there anything that you’d do or would want to contract for to evaluate the types of resins used?
Answer: Let’s start with the oldest, most common building block for the resin system which is resorcinol. Resorcinol is a volatile compound. One of the problems is if you put it in a compound during mixing, some of it comes out vaporized as out of the Banbury. It also vaporizes when you are processing the compound. One would have to worry a little about how much is left in the compound depending and that is what’s going to vary from plant to plant probably. You also, with a particular compound, there are two primary curatives that are used to cure-up the resorcinol into a polymer system. One is the HMM, the hexamethylenetetramine. The other one is -- what's the code, chemical name for the other one but, depending on -- those are the two and one is particularly bad because of the byproducts that come off.
Question: You’re talking about like an industrial hygiene issue now?
Answer: Also, it influences a lot of performance properties.
Question: My question now is: What are the analytical techniques that you would want to have employed to evaluate those issues? You’ve got the compound formula in front of you and I want to know what you do next.
Answer: All I could, again, is look at the ratios of resin to curative. Again I have not really been involved in a program where I evaluated levels per se and the ratios. The two critical factors would be the levels that are there and how much curative relative to how much of the base materials there.
Question: Let me be sure I’m clear. Can you identify any particular technique you’d use other than looking at the literature and looking at the formula?
Answer: The only other thing that you do is an analytical where you went in and basically tried to pull out or somehow identify how much of each is there or to run a compounding study where you would vary the amounts and ratios of the base and the curative.
Question: You’re saying actually make more rubber compound?
Answer: Make more rubber compound, yeah.
Question: I am presuming you don’t have the facility to do that?
Answer: No, I would not.
Question: Do you know anybody who would have the facility to do that?
Answer: There are at least two laboratories in the Akron area that are capable of doing that.
Question: Now is that something you’d recommend in this case?
Answer: I can’t answer that question.
Question: Why can’t you answer that question?
Answer: For two reasons: First of all, until I could see what was going on and basically and then I would have to consult with Mr. Crosby to determine if he would be willing or felt it necessary to spend the money.
Question: Specifically, let’s assume you did contract for that. Specifically, what would you do and what would you be trying to determine?
Answer: If you were to go in an experimental program you would outline a study. You would try to vary the ratios and the amounts around a certain point and then prepare the rubber and cure it and run the standard rubber test.
Question: So I assume that you would not be able to form the opinion as to what the various alternate ratios would be?
Answer: I think within the normal bounds of compounding I would be prepared to design a study.
(App. pp. 473-474)
Again, Petitioner has made an argument that is contrary to the record by misstating Dr. Duddey’s testimony.
Argument Petitioner’s Brief page 20
“When asked during his deposition to explain why he believes the subject tire failed due to “premature aging,” Dr. Duddey was unable to do so.”
Petitioner cites to the record at page 483 as an example of Dr. Duddey being asked this question and his inability to answer it. Dr. Duddey was not asked this question on page 483 or anywhere in his deposition. This assertion by the Petitioner is incorrect.
Argument Petitioner’s Brief page 20
“He admitted that the indicia of “aging” that he allegedly observed (hardness and cracking) could likely have been caused by the subject tire’s use and that he had no reliable way to analyze its cause or effect.”
Dr. Duddey did not testify that he had no reliable way to analyze the cause or effects of what he saw when he examined the tire. Likewise he never agreed that the cracking and hardness in the subject tire could likely have been caused by the tire’s use. He simply agreed that use was one of the potential causes of these indicia of aging.
V. THE PETITIONER HAS NOT MADE ANY SHOWING THAT COMPETITIVE HARM IS LIKELY TO RESULT FROM LIMITED DISCLOSURE OF THE SKIM COMPOUND DOCUMENTS IN THIS SPECIFIC CASE.
The Petitioner takes the position that any disclosure of the design information for the rubber compound will automatically result in competitive harm. It fails to cite to even one case where a court has ordered trade secrets produced in discovery in a products liability case and the information fell into the hands of a competitor. A quick search of the reported decisions around the country reveals that trade secrets are regularly ordered produced in litigation under the guidance of the courts and protective orders. To adopt Petitioner’s point of view would create an automatic presumption of harm without requiring any unique case specific showing which should be the criteria. Generalized conclusions about harm as set forth by Petitioner have no meaning and are of no value to the Court in addressing this issue.
If this were a commercial case involving a competitor, or potential competitor; then surely the risk of harm would be much greater. Likewise if Respondents’ counsel had a history of violating protective orders or the trial courts had a history of failing to enforce protective orders the Petitioner may have some validity to its argument. However, to ask the Court to adopt a standard assuming that all plaintiffs will violate non-disclosure provisions and that our trial courts will be unable to enforce their orders is a request not grounded in the realities of what is occurring daily in the courts of the State and throughout the United States.
Petitioner’s citation to Mr. Queiser, an engineer who works for Bridgestone Firestone and spends over 50% of his time working on litigation, is of no value in determining the likelihood of competitive harm. The fact that Mr. Queiser does not have confidence in the courts in South Carolina is of no consequence as he cites to no case where competitive harm has ever occurred to a tire company or to any product manufacturer due to a violation of a protective order. Furthermore, Mr. Queiser does not work for Petitioner and lacks the ability to speak for Petitioner concerning the degree of competitive harm that may occur from disclosure of the design of a component of an 11 year old tire that is no longer in production.
Judge Mullen ordered that a restrictive protective order be entered and gave Petitioner the opportunity to have input on the specific provisions of the order. This order would be in addition to the protective order already in place in this case governing the production of thousands of pages of materials already exchanged between the parties. See exhibit “A” to this brief. There is no allegation of any violation of this order by Respondents’ counsel or any of their experts. Simply put the claim of potential harm is extremely overstated by Petitioner and any potential harm can be guarded against by the entry of an appropriate protective order.
This Court should issue an opinion affirming the trial court’s order compelling disclosure of the skim compound information and in doing so clarify that Rule 26 is the standard governing discovery in products liability actions where trade secrets are involved.
Arnold Beacham, Jr.
YOUNG & SULLIVAN, L.L.C.
506 East Main Street
Lexington, SC 29072
& DETRICK, P. A.
BY: _________________________ ______
Ronnie L. Crosby
R. Alexander Murdaugh
John E. Parker
101 Mulberry Street, East
P. O. Box 457
Hampton, SC 29924
ATTORNEYS FOR RESPONDENT
March 6, 2008
Hampton, South Carolina
 Bridgestone sought a protective order pursuant to Rule 26. It now argues that the South Carolina Trade Secrets Act applies to the discovery dispute rather than Rule 26.
 To hold that the Trade Secrets Act extended to information located outside of South Carolina raises issues concerning the constitutionality of the Act in terms of equal protection. Surely there is no rational basis for creating a higher threshold for an injured resident of South Carolina than for a non-resident. Such an interpretation would afford a non-resident individual or corporation with a claim against a foreign corporation arising in South Carolina, the option of choosing a state with a less stringent requirement for seeking access to trade secrets. Putting South Carolina residents at such a disadvantage does nothing to help encourage businesses to locate within South Carolina.
 The Federal Rules of Civil Procedure are equally affected if the Trade Secrets Act is applied as urged by the Petitioner and amici.
 Under § 39-8-60(B) substantial need is determined by consideration of four factors. “Substantial need” as used in this section means: (1) the allegations in the initial pleading setting forth the factual predicate for or against liability have been plead with particularity; (2) the information sought is directly relevant to the allegations plead with particularity in the initial pleading; (3) the information is such that the proponent of the discovery will be substantially prejudiced if not permitted access to the information; and (4) a good faith basis exists for the belief that testimony based on or evidence deriving from the trade secret information will be admissible at trial.
 As a practical matter, requiring a party to know in advance that a defendant will assert a trade secret claim, and to which documents, places an incredibly unfair and almost insurmountable burden on the plaintiff from the outset. Nearly all products liability cases have the potential for trade secret claims to be raised in opposition to discovery requests. To interpret the Trade Secrets Act as requiring a prospective anticipation of such a claim at the time the initial complaint is filed creates an impossible obstacle to discovering a trade secret in an ordinary civil case. Such a reading of the Trade Secrets Act results in an obliteration of the pleading and discovery rules setout in the South Carolina Rules of Civil Procedure.
 Because the language of Rule 26(c), SCRCP, is nearly identical to that of its Federal counterpart, Rule 26(c), FRCP, Federal case law interpreting the Rule serves as highly persuasive precedent.