THE STATE OF SOUTH CAROLINA
IN THE SUPREME COURT


IN THE COURT’S ORIGINAL JURISDICTION
APPEAL FROM HAMPTON COUNTY
In the Court of Common Pleas

Carmen T. Mullen, Circuit Court Judge


Case No. 05-CP-25-456


Russell Laffitte, as Personal Representative of the Estate
of Angela Lynn Plyler........................................................................................ Respondent

v.

Bridgestone Corporation, Bridgestone/Firestone North
American Tire, LLC, Ford Motor Company, Bubba
Windham and Chuck Horton d/b/a Vintage Motors.......................................... Defendants

of whom Bridgestone Corporation is the.............................................................. Petitioner.


Case No. 05-CP-25-531


Russell Laffitte, as Personal Representative of the Estate
of Justin Plyler.................................................................................................... Respondent

v.

Bridgestone Corporation, Bridgestone/Firestone North
American Tire, LLC, Ford Motor Company, Bubba
Windham and Chuck Horton d/b/a Vintage Motors.......................................... Defendants

of whom Bridgestone Corporation is the.............................................................. Petitioner.


Case No. 05-CP-25-532


Alania Plyler, a minor by and through her Conservator,
Russell Laffitte................................................................................................... Respondent

v.

Bridgestone Corporation, Bridgestone/Firestone North
American Tire, LLC, Ford Motor Company, Bubba
Windham and Chuck Horton d/b/a Vintage Motors.......................................... Defendants

of whom Bridgestone Corporation is the.............................................................. Petitioner.


Case No. 05-CP-25-533


Hannah Plyler, a minor by and through her Conservator,
Russell Laffitte................................................................................................... Respondent

v.

Bridgestone Corporation, Bridgestone/Firestone North
American Tire, LLC, Ford Motor Company, Bubba
Windham and Chuck Horton d/b/a Vintage Motors.......................................... Defendants

of whom Bridgestone Corporation is the.............................................................. Petitioner.


PETITIONER’S REPLY BRIEF


M. Dawes Cooke, Jr.
Todd M. Musheff    
John W. Fletcher 
BARNWELL WHALEY PATTERSON
& HELMS, LLC
P. O. Drawer H
Charleston, SC  29402
(843) 577-7700 FAX (843) 577-7708
Attorneys for Petitioner
Bridgestone Corporation
Wallace K. Lightsey
WYCHE BURGESS FREEMAN  
& PARHAM, P.A.
44 East Camperdown Way, 29601
P.O. Box 728
Greenville, SC 29602-0278
(864) 242-8200

TABLE OF CONTENTS

  Page No.
Table of Authorities

ii
STATEMENT OF FACTS

1
ARGUMENT

2
  I. THE SOUTH CAROLINA TRADE SECRETS ACT APPLIES TO THIS DISCOVERY DISPUTE

2
  II.  RESPONDENTS FAILED TO ESTABLISH SUBSTANTIAL NEED FOR THE TRADE SECRET SKIM COMPOUND DOCUMENTS AS REQUIRED BY THE TRADE SECRETS ACT, § 39-8-60(B)

6
CONCLUSION

11

TABLE OF AUTHORITIES

Cases

Page No.
Bridgestone v. Mayberry, 878 N.E.2d 189 (Ind. 2007) 4-5
Crum v. Bridgestone/Firestone North American Tire, LLC, 907 A.2d 578 (Pa Super. Ct. 2006)

10
Eagle Container Co., LLC v. County of Newberry, 366 S.C. 611, 622 S.E.2d 733 (S.C. Ct. App. 2005)

4
Ex Parte Johnson, 187 S.C.1, 196 S.E.163 (S.C. 1938)

3
Griego v. Ford Motor Co., 19 F.Supp.2d 531 (D.S.C. 1998)

3
In re Bridgestone/Firestone, Inc., 106 S.W.3d 730 (Tex. 2003)

6-7
In re Remington Arms, 952 F.2d 1029 (8th Cir. 1991)

7, 10
Mann v. Cooper Tire Co., 816 N.Y.S.2d 45 (N.Y. App. Div. 2006)

7, 8
Mid-State Auto Auction v. Altman, 324 S.C. 65, 476 S.E.2d 690 (1996)

3, 5
Williams v. Peyton, 372 F.2d 216 (4th Cir. 1967).

3
Statutes

 
S.C. Code Ann. § 39-8-10

2
S.C. Code Ann. § 39-8-20

9
S.C. Code Ann. § 39-8-60

2, 3, 4, 5, 6, 7, 10
S.C. Code Ann. § 39-8-70

3
S.C. Code Ann. § 39-8-90

2
S.C. Code Ann. § 39-8-100

2, 3
S.C. Code Ann. § 39-8-110

3
Court Rules

 
South Carolina Rule of Civil Procedure 26(c)(7)

4, 7, 9, 10
South Carolina Rule of Civil Procedure 11

4

STATEMENT OF FACTS

Many of the “facts” set forth in Respondents’ brief are actually expert theories, unproven allegations and legal argument.  More importantly, however, these so-called “facts” do not satisfy Respondents’ burden of demonstrating that Bridgestone’s trade secret skim compound documents are necessary to prove their claims of defect. 

In fact, the authority on which Respondents rely does not support their claim that access to the trade secret formula is necessary in this case.  See Engineering Analysis Report and Initial Decision Regarding Firestone Wilderness AT Tires, USDOT October 2001.[1]  The National Highway Traffic Safety Administration (“NHTSA”) was able to conduct its analysis and reach a decision regarding belt edge separations in certain Firestone tires without having access to the formula for the skim stock used in those tires.  Instead, NHTSA’s investigation was based on analysis of performance data, shearography,[2] observations, physical measurements and chemical analysis, as well as review of test data.  Id. at iii.  NHTSA did not need the skim stock formula to conduct a technical analysis of the cause of tire failure, and this case is no different.  Respondents’ experts can conduct the same type of analyses that NHTSA relied on without the trade secret formula, just as they have in prior cases.

One of the facts not in dispute in this case is that the subject tire was nine years old at the time of the accident and had undergone many changes as a result of use and oxidation.  (See Respondents’ Brief, at 10).  Access to the formula for the skim stock used in the manufacture of the subject tire will not reveal whether the tire was properly designed and manufactured during the 25th week of 1996 at Bridgestone’s Hofu plant.  (See App. at 194 ¶ 39).  As a result, the trade secret formula information is not necessary to determine the cause of the subject tire’s failure, and the trial court erred in ordering Bridgestone to produce the complete formula and other skim compound documents.   

ARGUMENT

I. THE SOUTH CAROLINA TRADE SECRETS ACT APPLIES TO THIS DISCOVERY DISPUTE 

Without specifically ruling that the South Carolina Trade Secrets Act, §§ 39-8-10 et seq., (“the Act”) governs this dispute, the trial court was correct in conducting an analysis under the Act.  In this regard, the trial court’s analysis is consistent with the policy of this state as reflected by the General Assembly’s enactment of trade secret legislation.[3] 

By its unambiguous language, § 39-8-60(B) reflects a clear legislative intent that it apply to “any civil action.” While some sections of the Act are expressly limited to actions based on misappropriation of a trade secret,[4] Respondents’ suggestion that every provision of the Act is limited to trade secret misappropriation actions is inconsistent with the plain language of the statute — which confirms that portions of the statute were intended to apply to other types of cases.  For example, § 39-8-100 refers to any “criminal proceeding” during which “a trade secret may be disclosed.”  Nothing in that provision suggests it is limited to criminal proceedings related to misappropriation.  Likewise, § 39-8-90 applies to “persons guilty of stealing trade secrets” and describes the criminal penalties that may result from such a prosecution.  Clearly, these latter provisions do not apply to a civil remedy for misappropriation and support the contention that the Act, as a whole, was not intended to be limited to misappropriation cases.  Thus, Respondents’ argument cannot be squared with the plain language of other provisions of the statute.

With regard to the specific section of the Act at issue in this case, in order to determine the intended application of a specific provision of the Act, the language of each provision of the statute must be read as a whole.  See Mid-State Auto Auction v. Altman, 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996).  Reading § 39-8-60 as a whole, it is clear that the legislature made unmistakable distinctions between the applicability of each subsection.  For example, § 39-8-60(A) applies to “an action under this chapter,” whereas § 39-8-60(B) applies to “any civil action where discovery is sought of information designated by its holder as a trade secret.”[5] (emphasis added).  This distinction reflects the legislature’s intent that the “substantial need” requirement of § 39-8-60(B) not be restricted only to cases brought “under this chapter” for misappropriation of trade secrets, but rather extend more broadly to “any civil action” in which a party seeks discovery of a trade secret.    

Furthermore, Respondents’ suggestion that § 39-8-110 limits the application of every provision within the Act is contrary to the plain language of those provisions and the clear legislative intent.[6]  For example, the title of § 39-8-110 establishes the application of those provisions, “Chapter’s effect on conflicting tort, restitutionary and other laws; effect on other remedies.” (emphasis added). Thus, § 39-8-110(C) is only implicated when the provisions of the Act may conflict with other laws or remedies.  Such is not the case here.  Section 39-8-60(B) does not conflict with any contractual or tort law or remedy.  Instead, § 39-8-60(B) reflects a codification and augmentation of the common law heightened standards governing the discovery of trade secrets, traditionally applied pursuant to Rule of Civil Procedure 26(c)(7).

Respondents’ reference to the history of the Trade Secrets Act is inapplicable here because the applicable provision of the Act is not ambiguous on its face.  See Eagle Container Co., LLC v. County of Newberry, 366 S.C. 611, 631, 622 S.E.2d 733, 743 (S.C. Ct. App. 2005).  Moreover, despite Respondents’ strained interpretation of the history of the Act, the prior language of the Act regarding the effect on remedies does not contradict the plain language of § 39-8-60(B) governing discovery of trade secrets in civil actions.  The legislature’s deliberate decision, when it enacted the 1997 amendments to the Uniform Trade Secrets Act, to depart from the Uniform Act in order to provide even greater protection for trade secrets is not inconsistent with the purposes of that Uniform Act; instead, the South Carolina Trade Secrets Act augments the protections typically available under Rule 26 by codifying the test to be applied for discovery of trade secrets.  Thus, Respondents’ claim that the Trade Secrets Act impermissibly supplants the Rules of Civil Procedure is without merit.[7] 

Furthermore, most states that have adopted the Uniform Trade Secrets Act do not limit its application only to cases based on misappropriation of trade secrets.  Rather, those states generally look to the language of that Act to define a trade secret as the first step in conducting an analysis under Rule 26.  See, e.g., Bridgestone v. Mayberry, 878 N.E.2d 189, 194 (Ind. 2007) (applying the definition of “trade secret” from the Uniform Trade Secrets Act in determining that the skim stock formula qualifies as a trade secret for a protective order may be entered).  In other words, even where the governing Trade Secrets Act does not expressly apply outside of the misappropriation context, courts routinely apply provisions of the Uniform Trade Secrets Act to shape the trade secret analysis in other contexts.  Accordingly, Respondents’ suggestion that no aspect of the South Carolina Trade Secrets Act applies to this dispute is without merit.

Finally, Respondents’ reading of § 39-8-60(J) does not comport with the plain language and clear intent of the remainder of that section and the purposes of the Trade Secrets Act.  Section 39-8-60(J) should not be read as limiting trade secret protection to information present in the state, but rather as expanding protection for trade secrets present in this state to actions brought elsewhere.[8]  Paragraph (J) states that all of the provisions set forth in § 39-8-60 apply to “any civil action brought within or without this State where discovery is sought of trade secret information present in this State.”  There is no evidence that the legislature intended to afford legitimate trade secrets in other jurisdictions less protection than trade secrets present in South Carolina.  Rather, the plain meaning of this section is that the legislature intended to prevent courts in other jurisdictions from circumventing the protections afforded by the Act as to trade secrets present in South Carolina.      

In short, were the Court to determine that § 39-8-60(B) does not apply to this dispute, it would render the language “in any civil action” meaningless.  See Mid-State Auto Auction, supra (words used in statute “must be given their ordinary meaning” unless something in the statute requires a different interpretation).  Here, there is no other interpretation required of the language “in any civil action.”  As a result, the Court should give effect to the plain language of the statute and uphold the trial court’s application of the Act requiring Respondents to demonstrate a “substantial need” for the trade secret information as defined in § 39-8-60(B).

II. RESPONDENTS FAILED TO ESTABLISH SUBSTANTIAL NEED FOR THE TRADE SECRET SKIM COMPOUND DOCUMENTS AS REQUIRED BY THE TRADE SECRETS ACT, § 39-8-60(B)

Respondents suggest that their purported inability to prove a design defect claim should satisfy the substantial need requirement “without any need to look further” (see Respondents’ Brief, at 23), thereby ignoring the requirement that they establish all of the factors set out in § 39-8-60(B).  As discussed in Bridgestone’s initial brief, Respondents failed to satisfy each of the factors mandated in the Act.[9]  Respondents’ brief adds little to support their claim of substantial need.

In making the specious argument of inability to prove their design defect claim, Respondents ignore the availability of other evidence typically relied upon in support of defect claims and analysis in other cases.  As discussed above, NHTSA conducted a defect investigation based on analysis of performance and testing data — not trade secret skim stock formulae.  Respondents have presented no evidence to establish that this case is any different or to explain why their experts would be unable to reach opinions as to an alleged design defect in this case, when such experts have not been hampered in other cases without access to the trade secret formula. See In re Bridgestone/Firestone, Inc., 106 S.W.3d 730, 733 (Tex. 2003). 

Respondents’ attempt to rehabilitate the testimony of their experts is belied by the record before the Court.[10]  The testimony fails to establish any need for the complete skim stock formula.  Without any evidence to demonstrate why they need the complete skim stock formula and other skim compound documents and how they would be substantially prejudiced without this information, Respondents have failed to satisfy the requirement of substantial need.

The same result follows under a Rule 26(c)(7) analysis.  Much like the requirements of § 39-8-60(B), Rule 26(c)(7) requires a requesting party to demonstrate that requested trade secret information is both relevant and necessary to prepare the case for trial.  In re Remington Arms, Inc., 952 F.2d 1029, 1032 (8th Cir. 1991).  As demonstrated above, Respondents have not established that the trade secret formula and skim compound documents are necessary to prepare the case for trial. 

Contrary to Respondents’ suggestion, the court’s holding in Mann v. Cooper Tire Co., 816 N.Y.S.2d 45 (N.Y. App. Div. 2006) does not support their argument that disclosure of the complete formula is necessary to prove their claims.  The Mann opinion is easily distinguishable.  That case involved a request for the ingredients used by Cooper Tire and did not address the disclosure of the complete formula for any compound.  Significantly, the Mann court found that the information at issue there — the ingredients — did not constitute a trade secret.  Here, by contrast, Respondents seek the entire skim stock formula along with numerous written materials related to it, and they have conceded that this information constitutes a trade secret.  Furthermore, the plaintiffs in Mann apparently had not been provided with the same data that Bridgestone has offered here to Respondents as a lesser intrusive alternative to satisfy their stated inquiry while protecting Bridgestone’s trade secret information.[11]  As a result, Respondents’ reliance on this opinion is wholly misplaced. 

In contrast to the one decision cited by Respondents, Bridgestone has provided the Court with more than a dozen orders and opinions from cases across the country where courts have determined that the plaintiffs had failed to demonstrate the requisite need for the trade secret formula.  For example, the Texas Supreme Court considered the discoverability of the skim stock formula in In re Bridgestone/Firestone, Inc., 106 S.W.3d 730 (Tex. 2003).  Despite expert affidavits submitted by plaintiffs, the court determined that they had failed to establish that the formula was both relevant and necessary, because the experts did not indicate “whether or how knowing a tire's specified ingredients will show whether the finished tire was defective.”  Id. at 733.  Such is the case here.  Respondents’ experts have not indicated how knowledge of the complete formula would better enable them to show whether the subject tire was defective in design.

Therefore, regardless of whether the Court applies the “substantial need” test of the Trade Secrets Act or the “relevant and necessary” test of Rule 26(c)(7), the end result is the same.  Because Respondents have failed to establish that they need the complete skim stock formula and related information to prove their design defect claim, the Court should reverse the trial court’s order requiring disclosure of the trade secret skim compound documents.

Finally, Respondents claim that “generalized conclusions about harm” are insufficient to warrant protection of highly valuable trade secret information.  Respondents’ argument defies logic and is directly contrary to the rationale behind trade secret law.  Respondents concede that the information at issue is a trade secret.  By its very definition, a trade secret “derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other person who can obtain economic value from its disclosure or use.”  See S.C. Code § 39-8-20.  Disclosure of the trade secret formula such that it becomes generally known would decrease the value of this information.  Moreover, the evidence indicates that these formulas are closely guarded secrets by other tire manufacturers and that the tire industry is a highly competitive global industry where disclosure of compounding technology would provide a competitor with an advantage to Bridgestone’s detriment in the marketplace. (See App. at 371 ¶ 32).  Thus, the harm that would result to Bridgestone from disclosure of its skim stock formula is clear. 

While Respondents may believe that protective orders are foolproof, courts across the country have expressed less confidence in the effectiveness of protective orders in trade secret cases.  See, e.g., In re Remington Arms, 952 F.2d at 1033; Crum v. Bridgestone/Firestone North American Tire, LLC, 907 A.2d 578, 584 (Pa Super. Ct. 2006).  Respondents’ experts have made careers of testifying against tire manufacturers in cases like this one, and they are closely networked with plaintiffs’ attorneys in other cases.  If they are allowed access to Bridgestone’s skim stock formula, they cannot “unknow it,” and it will inevitably become a basis for their opinion against some other manufacturer, a competitor of Bridgestone.  This is Bridgestone’s concern:  Not that Respondents’ experts will find Bridgestone’s formula defective, but that they will conclude that it is not defective and then in some other case opine that another manufacturer’s formula is defective because it does not have certain processes contained in Bridgestone’s formula.  At that point, Bridgestone’s competitor will know exactly what it needs to do to improve its formula, and Bridgestone will have lost the competitive advantage of what used to be its valuable trade secret.  The competitive damage that would result cannot be remedied by court sanctions for violation of a protective order.

This is exactly what the heightened standard for discovery under the South Carolina Act was intended to prohibit, when, as here, the plaintiff cannot demonstrate substantial need for the protected information.  Without the mandatory showing of substantial need, the adequacy of the protective order entered by the trial court is immaterial.  Both §  39-8-60(B) and Rule 26(c)(7) specifically contemplate shielding trade secret information from discovery when the litigant seeking it does not have a strong need for the information to pursue her case.[12]  Therefore, where disclosure is not warranted by a showing of substantial need for the trade secret information, the terms of the protective order governing disclosure should not even come into play.  In sum, without a showing of substantial need, disclosure should not be permitted under any protective order, no matter how restrictive.     

CONCLUSION

Based on the foregoing, Bridgestone respectfully requests that this Court reverse the trial court’s order requiring disclosure of Bridgestone’s trade secret skim compound documents.

BARNWELL WHALEY PATTERSON & HELMS, LLC

By:                                                                                   
M. DAWES COOKE, JR.
TODD M. MUSHEFF
JOHN W. FLETCHER
885 Island Park Drive (28492)
P. O. Drawer H
Charleston, SC  29402
(843) 577-7700 FAX (843) 577-7708

WALLACE K. LIGHTSEY, SC Bar No. 6476
WYCHE BURGESS FREEMAN & PARHAM, P.A.
44 East Camperdown Way, 29601
Post Office Box 728
Greenville, S.C. 29602-0728
(864) 242-8200
Attorneys for Petitioner Bridgestone Corporation


[1] Bridgestone is attaching a copy of NHTSA’s report for the Court’s convenience.

[2] Shearography is a form of non-destructive analysis involving “a double-exposure photographic recording, with the tire deformed under stress between exposures.”  Id. at 19.  

[3] As set forth in the Petitioner’s Brief, the trial court misapplied the factors set forth in the Act, but was correct in applying § 39-8-60(B) to this dispute.

[4] See, e.g., § 39-8-60(A) (applying only to “an action under this chapter”).

[5] Similarly, other provisions in the Act reflect a clear intent that they apply to particular types of actions, including “action[s] for misappropriation” (§ 39-8-70), and “criminal proceeding[s]” (§ 39-8-100(A)).

[6] Respondents’ reliance on the U.S. District Court’s opinion, Griego v. Ford Motor Co., 19 F.Supp.2d 531 (D.S.C. 1998), is misguided since that court’s interpretation of a provision of state law is not binding on this Court.  See Ex Parte Johnson, 187 S.C.1, 196 S.E.163 (S.C. 1938); Williams v. Peyton, 372 F.2d 216, 219 (4th Cir. 1967).

[7] Likewise, the pleading requirements of §39-8-60(B)(1) and (2) do not supplant the rules of pleading in South Carolina.  These requirements comport with the general rule of pleading which mandates that a party have a good faith basis for the allegations set forth in the pleading.  In a case such as this, the requirement of Rule 11 generally calls for some evidence of a “defect” in the tire or product at issue in order to meet the plaintiff’s good faith obligations. 

[8] To hold, as Respondents suggest, that the Trade Secrets Act does not apply because Bridgestone’s trade secret information is not physically located in the state would implicate due process and equal protection concerns that the legislature clearly did not intend.

[9] Bridgestone does not suggest that the specific trade secret documents must be identified in the initial pleadings, as Respondents inaccurately claim.  This is an obvious straw man.  Bridgestone’s argument is merely that the pleading must contain some particularized factual allegation(s) to which the trade secret information is directly relevant. 

[10] For example, Respondents claim that Bridgestone has misrepresented Dr. Duddey’s testimony regarding access to other skim stock formulas to serve as a basis for comparison for Bridgestone’s formula.  As Duddey testified:

Q. Can we agree that you don't have possession of any skim stock formula used by any tire manufacturer in any tire that you could use in this case to compare the Bridgestone skim stock formula with if you obtained it?

A The one area that I would have a basis for comparison is that all suppliers, when they're developing a new material, use formulations that are pretty much down the middle of the road of all their tire customers.  They may not be exact, but the basis is there.

Q I guess that wasn't my question.  I asked you about skim stock formulas that were actually used in tires by any manufacturer.  Do you have any such formulation that you have access to, have a copy of that you can legally use in this case to compare the Bridgestone formula with if you get it?

A I don't believe I could legally compare it to anything that I have been my possession.

(See App. at pp. 295:23 – 296:14).  This testimony is entirely consistent with Bridgestone’s statement that Dr. Duddey “is not in possession of any tire company’s belt skim compound formula against which he might compare the Bridgestone trade secret formula at issue.”  (See Petitioner’s Brief, at 14).  Bridgestone’s representations of Duddey’s testimony are consistent with and supported by the testimony in the record.

[11] See Petitioner’s Brief, pp. 26-28, for a discussion of the lesser intrusive alternatives presented to the trial court.

[12] The first option available under Rule 26(c)(7) is “that a trade secret or other confidential research, development, or commercial information not be disclosed.”