Brown v. Michelin North America, Inc.

Citations: 161 So. 3d 164; 2014 WL 272329; 2014 Ala. LEXIS 8Docket: 1121330 and 1121341

Court: Supreme Court of Alabama; January 23, 2014; Alabama; State Supreme Court

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Michelin North America, Inc. petitions the court for writs of mandamus to vacate two orders from the Mobile Circuit Court: one allowing plaintiff Betty C. Brown to conduct an on-site inspection of Michelin's tire-manufacturing facility in Ardmore, Oklahoma, and another compelling Michelin to answer specific interrogatories and document requests from Brown. The court grants the petition related to the facility inspection and partially grants the petition concerning the interrogatories and document requests.

The case arises from an incident on May 25, 2010, where a tire failure on Brown's vehicle led to an accident resulting in the death of her husband, George A. Brown, and injuries to Betty. The tire involved was a B.F. Goodrich model manufactured by Michelin. Brown filed a lawsuit against Michelin, alleging various claims including products liability and negligence. Alongside her complaint, she submitted a discovery request for extensive information, which Michelin contested as overbroad and irrelevant, particularly seeking details about tires other than the one in question.

Despite initially agreeing on a protective order for handling confidential documents, Michelin later refused to provide all requested information. On March 17, 2013, Brown filed a motion to compel responses to outstanding interrogatories and document requests. Michelin responded by asserting that some requests involved trade secrets and were overly broad. Concurrently, Brown requested to inspect Michelin’s facility, which Michelin opposed, citing similar concerns regarding trade secrets and relevance.

After a hearing on July 10, 2013, the trial court issued orders on August 5, 2013, granting both Brown’s motion to compel and her motion to inspect the facility, defining the scope of discoverable evidence Michelin was required to provide.

The relevant scope for discoverable evidence includes all Michelin passenger or light truck radial tires manufactured between January 1, 2000, and December 31, 2010, with specific dimensions: 14 to 17-inch wheel diameters, 185 to 275 millimeter widths, aspect ratios of 50 to 80, and speed ratings of 130 mph or below, regardless of the manufacturing plant. Michelin was ordered to respond to 10 interrogatories and 22 requests for production by August 19, 2013. The trial court permitted Brown to conduct an on-site inspection of Michelin's facilities, ruling that Brown’s need for inspection outweighed potential harm to Michelin regarding trade secrets, while also defining the inspection's scope for protection. Michelin sought to stay this order for appellate review and requested reconsideration or certification for interlocutory appeal on August 7, which the court denied on August 8. Michelin subsequently filed a petition for a writ of mandamus to vacate the inspection order. On August 14, Michelin also moved to stay the order compelling discovery, arguing it would require disclosing irrelevant trade secrets and incur excessive costs, supported by a third affidavit from Slagh. Brown opposed this motion and sought to strike Slagh's affidavit. On August 16, the court denied Michelin's motions and granted Brown's motion to strike. Following these developments, Michelin filed an emergency motion to stay proceedings due to the approaching discovery deadline. The court denied the motions on August 16 but later stayed all proceedings after Michelin petitioned for a writ of mandamus regarding the orders related to three interrogatories and twelve document requests, which was docketed as case no. 1121341.

On September 4, 2013, Brown was ordered to file a response in case no. 1121330, subsequently filing responses and motions to strike Michelin’s writ of mandamus petition in case no. 1121341 and Slagh’s affidavit. The parties filed various responses, leading to the consolidation of Michelin’s two petitions for a single opinion. In both cases, Michelin seeks mandamus review of trial court orders regarding discovery issues, which are typically within the trial court's discretion and can only be reversed if the court clearly exceeded its discretion and no adequate remedy exists through ordinary appeal. The petitioner bears the burden of proving these conditions.

Mandamus review is limited to specific discovery matters, including privilege disregard, the production of irrelevant documents, and orders undermining a party's case. The current case involves a challenge to a trial court order allowing Brown to inspect Michelin’s Ardmore facility, with Michelin arguing that this order fails to protect its trade secrets and compels irrelevant disclosures. The court recognizes that trade secrets may be privileged and not admissible, as established by Rule 507 of the Alabama Rules of Evidence. The party claiming the trade secret privilege must demonstrate that the information is indeed a trade secret that could cause injury if disclosed. If such a showing is made, the burden shifts to the opposing party to prove the necessity and relevance of the information, leading to a balancing process by the trial court to determine if the need for disclosure outweighs potential harm.

A court must evaluate the relevance and necessity of discovery requests against the potential harm of disclosing trade secrets. If the requesting party fails to demonstrate both relevance and need, the discovery will not be granted, and trade secrets remain protected. In the case at hand, while the trial court did not definitively rule on whether Michelin’s manufacturing processes and equipment at its Ardmore facility qualify as trade secrets, it acknowledged that Brown had sufficiently established her need for an inspection, allowing her to document these processes for her trial presentation.

Evidence, including an affidavit from a long-term Michelin employee, supports that the processes at Ardmore do meet the definition of trade secrets under Alabama law. Brown contested this by pointing out that Michelin has publicly shared a video on tire manufacturing and conducted tours of the facility. However, the video does not showcase specific manufacturing processes from Ardmore, and Michelin imposes strict access controls for visitors, emphasizing that entry is limited to those with legitimate business reasons and that confidentiality measures are in place, such as signed agreements and restrictions against recording devices.

Dealers and customers granted access to Michelin's plant must sign a confidentiality agreement and are given escorted ‘wide aisle’ tours, prohibiting photography or video capture. These tours allow a general view of operations but exclude detailed insights into machine design, work methods, or specifications. Historically, such tours were extended to children and unknowledgeable individuals during shutdowns, but this practice has not occurred in the past fifteen years. Michelin maintains that it has made reasonable efforts to secure its trade secrets, countering Brown's claim that the trade-secret privilege should not apply. The court initially found Michelin met its burden of proving the information is a trade secret that, if disclosed, would harm its interests.

Brown argues that access to photographs and videos of the Ardmore facility is essential for her case, as it would help demonstrate negligent design or manufacturing defects in the tire relevant to the litigation. She contends that without visual documentation, she and the jury would lack critical information necessary to understand potential negligence or failures in the tire’s production processes. The ability to illustrate these operational factors is pivotal for the jury to grasp the context of the manufacturing environment, including potential mishaps leading to defects. The court recognizes the significance of a documented plant inspection to inform jurors about the conditions affecting tire production and ensure they are not left to speculate about the manufacturing environment.

Plaintiff's counsel intends to demonstrate to the jury how design and manufacturing defects might occur and be overlooked during inspections, advocating for the use of photographs and videos of the tire manufacturing process instead of relying solely on diagrams and charts. While visual evidence from Michelin’s manufacturing processes would likely aid in presenting the case, it is not deemed necessary for Brown to access Michelin's trade secrets to establish her claims. Indiana law requires that necessity means a party cannot present their case without the trade secret, posing a real threat of an unjust outcome, rather than a mere possibility. Brown's expert witness, Troy Cottles, has significant experience in the tire industry and can describe the tire-making process using existing resources, including a Michelin-produced video. Thus, it appears Brown can sufficiently present her case without access to Michelin’s facility. Brown argues that an inspection would bolster Cottles’ findings regarding the defect in the tire, claiming this access is necessary and relevant. However, Michelin counters that Cottles has already formed an expert opinion based solely on the tire inspection, indicating that access to the Ardmore facility is not essential. Michelin further asserts that the tire in question was manufactured in 2004, and the facility has since changed, challenging the relevance of the requested trade secrets.

Glazener’s affidavit details extensive changes at the Ardmore facility since the manufacturing of the subject tire during the 26th week of 2004. Over the nine years since production, every tire building machine potentially used for the subject tire has been upgraded or modified, including enhancements to the component alignment system, new ply trays, guides, and splice presses. The layout of the tire building room has also been reconfigured to improve manufacturing capacity. Significant changes have occurred in the equipment used for fabricating components like treads and sidewalls, including new and modified component cutters, reconfigured extruders, and additional preparation machinery. Curing equipment has seen substantial upgrades, such as new cure presses and hydraulic systems. Other modifications include a new conveyor system, updated tire balancing machines, and various facility enhancements like resurfaced floors and new lighting.

The legal context references Morton v. Cooper Tire, Rubber Co., where a court allowed an inspection of a tire-manufacturing facility related to an Americans with Disabilities Act claim. However, the court also noted cases where inspections were denied due to the elapsed time since the tire’s manufacture, highlighting that circumstances vary significantly between cases. For instance, in Murphy v. Cooper Tire, the court denied an inspection request due to modifications in the plant that rendered it unreflective of past manufacturing processes, indicating that time and changes in the facility can impact the relevance of inspections for liability claims.

An inspection of a tire manufacturing facility was denied due to the marginal relevance of the requested information and the potential disclosure of trade secrets. In *Daughtry v. Cooper Tire*, the court rejected a request for inspection of Cooper Tire's facility, noting significant changes since the tire was manufactured in 2002, which would expose trade secrets with minimal value to the case. Similarly, in *Williams v. Daihatsu*, the court denied an expert's inspection request for a facility that had not produced the relevant tire in five years, as current production methods would differ significantly from those used previously. In *Hajek v. Kumho Tire*, a request for inspection of a facility was also denied due to changes made since the manufacture of the accident tire. In the current case, the tire in question was manufactured over nine years prior, and the facility had undergone substantial modifications, leading to the conclusion that the inspection was not necessary or relevant. Consequently, the trial court exceeded its discretion by granting the inspection request, which is to be vacated.

Additionally, Michelin challenged a trial court order requiring it to respond to certain interrogatories and production requests from Brown, arguing that some requests were overly broad, involved protected trade secrets, and posed an excessive burden. Before addressing these objections, the court noted that Brown had initiated the discovery requests in November 2011 and sought to compel responses in March 2013 after failing to resolve the objections with Michelin.

Parties submitted multiple briefs concerning Brown’s motion to compel, leading to two hearings on April 26 and July 10, 2013, focused on the scope of discovery. Michelin presented affidavits from its expert, Slagh, arguing that the discovery requests were overly broad and sought protected trade secrets, without claiming an undue burden at that time. On August 5, 2013, the trial court granted Brown's motion to compel. Michelin's excessive-burden argument was first raised in a motion for reconsideration on August 14, 2013, accompanied by a third affidavit from Slagh. Brown moved to strike this affidavit, and on August 16, 2013, the trial court granted this motion, emphasizing that Michelin had ample opportunities to present its evidence previously and failed to communicate with Brown's counsel for a compromise.

Michelin reasserted its excessive-burden argument, contesting the trial court's decision to strike Slagh's affidavit. Brown sought to strike Michelin’s petition based on its reliance on the affidavit. While the court denied the motion to strike the petition, it upheld the trial court’s discretion in striking the affidavit. Consequently, the court did not consider Slagh's affidavit in evaluating Michelin’s mandamus petition, stating that it could only review evidence presented before the trial court. Michelin contended that its third affidavit was timely under Alabama law, arguing that it was required to file a protective order post-grant of the motion to compel, as established in Ex parte Reynolds Metals Co. However, the court noted that while some courts may accept new evidence in support of a protective order after a motion to compel, it is not an obligation for all courts.

A trial court has broad discretion in managing the discovery process, as established by precedent. In this case, prolonged disputes over discovery scope lasted over two years, prompting two hearings where the court expressed frustration with the case’s progress and the parties' delays. Michelin did not present a substantial argument against the discovery requests until after the court ruled to compel compliance, which occurred following extensive discussions and hearings. The court deemed Michelin’s later claims of undue burden as too late to consider, emphasizing that allowing such late arguments would undermine the prior proceedings. 

Additionally, the court must assess whether the order compelling discovery is excessively broad or infringes on Michelin's protected trade secrets. Michelin's compelled discovery includes documents related to over 2,600 tire designs spanning more than a decade, encompassing specifications, economic analyses, test studies, and internal documents concerning tread separations. The specific requests include detailed documents such as design changes, economic analyses, test studies, decision trees, and internal memos related to tire performance issues.

Michelin is ordered to produce documents related to claims, complaints, and lawsuits regarding all tires within the discovery scope, including warranty return data and documents related to product liability claims involving tread separations. The dispute centers on the relevance of the tires connected to Brown's claim, with Michelin asserting that only the P265/70R15 110S B.F. Goodrich Radial Long Trail T/A tires manufactured at the Ardmore facility from 2002-2006 are relevant. Michelin supports this limitation by citing affidavits indicating that their various tire models differ significantly in design and specifications, thus arguing those outside this scope are irrelevant. Conversely, Brown's expert, Cottles, argues that Michelin's restrictive discovery scope is evasive, potentially concealing evidence linked to design and manufacturing defects. Cottles asserts that all inspected Michelin tires share a basic structure, regardless of size or branding, indicating that common design characteristics exist among different tire models, making broader discovery pertinent.

As many as 20 tire brands can share a single green tire specification (GTS), allowing Michelin and other manufacturers to streamline design and manufacturing processes. This results in interchangeable components across various Michelin tire lines. The primary failure mode identified in Michelin tires, regardless of size or manufacturing origin, is belt-leaving-belt separation, typically beginning as edge separation after several years of use. Similar design and manufacturing defects that caused tread separation in previous cases are present in the current case, particularly the lack of nylon caps intended to prevent belt detachment. Michelin was aware of these defects prior to manufacturing the tire in question. The belt skim rubber used across all Michelin light truck and passenger tires is consistent, and defects tend to emerge after prolonged service, often due to deterioration of internal materials, which can be exacerbated by poor design or manufacturing practices. The trial court faced a discovery dispute with Michelin's expert asserting relevance only to specific tire models, while Brown's expert claimed relevance for a broader range of Michelin tires produced within a decade. The court expressed difficulty reconciling these opposing views and leaned toward accepting Brown's broader discovery request, while Michelin's counsel sought a compromise.

Brown has established a clear position, with no middle ground identified. An attorney proposed submitting a compromise position to the court within ten days regarding a plant inspection order, but Michelin did not follow through, and the trial court's ruling was made based on the available arguments and evidence. The evidence presented was often conflicting, leaving the decision to the trial court's discretion. The court's definition of the discovery scope was deemed appropriate, and it was noted that Michelin's objection to producing protected trade secrets, such as quality-assurance processes and inspection methodologies, was weighed against Brown's need for the information. The trial court's implicit conclusion that Brown's need outweighed potential harm to Michelin was generally supported, particularly given a prior protective order. However, the requirement for Michelin to produce information related to any tire failure was deemed excessive. This aligns with prior rulings in Ex parte Cooper Tire, where it was determined that discovery should be limited to materials directly related to the alleged defect causing the incident. Consequently, Michelin is not obligated to disclose information pertaining to defects or tire failures unrelated to tread separation, as the case centers on this specific issue.

The trial court's management of the discovery process is upheld, and it did not exceed its discretion when compelling production. Michelin petitioned for writs of mandamus to vacate two orders: one allowing Brown to inspect its Ardmore tire-manufacturing facility and another compelling responses to certain interrogatories and document requests. The court granted Michelin's petition regarding the inspection order, directing the trial court to vacate it. For the second petition, the court granted it in part, modifying the discovery order to exclude materials unrelated to Michelin tire failures due to tread separation, while denying the petition in all other respects. The trial court previously held a hearing on Brown's discovery motions, and several organizations submitted amici curiae briefs supporting Michelin. Alabama law defines a trade secret, detailing the criteria for what constitutes such information, emphasizing its economic value and the necessity of maintaining its secrecy. Michelin's objections to interrogatories, including one not specifically cited, relate to the expansive nature of the requests.