ST. LOUIS – A federal magistrate judge handed both sides victories in a dispute over protecting confidential business information in a breach of contract lawsuit.
C2 Fibers invented a process for converting glass waste into structural reinforced plastics that could be used in railroad ties. On June 16, 2017, another company, Nortrak, entered into an agreement to buy C2 Fibers, according to a memorandum and order entered by U.S. Magistrate Noelle Collins. The sale did not go through, but Nortrak and C2 Fibers executed an exclusive distribution and supply agreement that included an option for Nortrak to purchase at least 51% of C2 Fibers.
On June 16, 2017, Nice Glass purchased from C2 Fibers the process of converting glass waste into plastic and contracts C2 had with Owens Corning and Nortrak.
Under the sales contract, Nice Glass was required to pay C2 Fibers a series of royalty payments.
Nice sued C2 in 2018 in U.S. District Court for the Eastern District of Missouri, claiming C2 had breached the purchase agreement and asking the court to relieve it of its obligation to pay royalties to C2.
In a counterclaim, C2 contends that Nice Glass broke the sales agreement by conspiring with another company, Evertrak LLC, to “design ,manufacture, market, and sell the composite railroad ties using the intellectual property and technology of C2 Fibers.”
Judge Collins referred the case to alternative dispute resolution on Jan. 24. On Feb. 26, the parties asked Collins for a protective order relating to confidential information and trade secrets that might be provided in the discovery process.
The parties agreed on most of the terms of the protective order, but there was a dispute over several others.
Judge Collins granted some of parties requests related to those disputes and denied others in her order on April 10. She denied Nortrak's insistence that certain sensitive documents be designated "Attorneys' Eyes Only."
The counterclaim defendants, and "Nortrak specifically, have failed to meet their burden to establish that this material would not be relevant to the counterclaims or their defenses such that a wholesale ban on disclosure would be warranted," the judge wrote." Furthermore, the protections afforded “Highly Confidential” material provide significant safeguards to the relevant items that fall into this category."
U.S. District Court, Eastern District of Missouri, case number 4:18-CV-01835-NCC