Judge Issues Protective Order in Maxava Versus Vision Solutions Suit

March 21, 2011 Alex Woodie

The federal judge overseeing the legal battle between Maxava and Vision Solutions issued a protective order in February that will keep certain court filings out of the public realm. Meanwhile, the discovery process has erupted into a tug-of-war over documents, including 34,000 emails sent by Vision employees. The wrangling has caused the deadline for discovery to be extended, as a July trial date looms.

As lawsuits are prone to do, the legal battle between Maxava and Vision Solutions has turned into a knock-down, drag-out slugfest between two proud parties that won’t back down. Maxava’s original allegation that its main competitor engaged in false advertising when it disparaged Maxava’s products to potential customers has been expanded and now includes accusations of monopolistic behavior and violations of the Lanham and Sherman Acts, not just by Vision but by Vision’s partner, Sirius Computer Solutions. Already, the 15-month ordeal has consumed thousands of attorney hours and generated hundreds of thousands of pages of documents.

Maxava won an early legal victory last June, when a judge granted a temporary injunction and ordered Vision to stop distributing marketing materials that Maxava claims are illegal. Then in July, Maxava added Sirius to the suit, saying the company worked with Vision to denigrate Maxava and its products.

Vision and Sirius have fought Maxava every step of the way, and in December Sirius won a partial victory when the court dismissed a portion of Maxava’s claims against Sirius regarding trade libel and Lanham Act violations. The court allowed Maxava to supplement its claims against Sirius, and the company did so by filing a third amended complaint in January.

However, the third amended complaint has been hidden from the public’s view. In February, the court granted a request by both sides for a protective order covering the third amended complaint, as well as documents produced during discovery and Vision’s response responses to 80 questions from Maxava attorneys (the interrogatories). It was the second time that a protective order had been requested; Judge George Wu denied the first request in October.

The three parties agree that some information in this case is so sensitive that it should be considered confidential. Among the documents that will carry the “for attorneys’ eyes only” label will be those that contain commercially sensitive, proprietary, or otherwise confidential or private information, such as customer or client lists; rates structures; pricing lists and data; financial information; sales and marketing studies; strategies; and information that the parties may be contractually obligated with third parties to keep confidential.

Another rationale for the protective order is the concern that third parties (partners and customers) who are served with document requests in conjunction with the discovery process may not willingly share pertinent information if they think their responses would be made public.

While both companies requested the protective order, Maxava’s lawyers soon accused Vision of exploiting the order, arguing that Vision was withholding information in its responses to discovery requests and interrogatories. “Such wholesale indiscriminate designations of documents as confidential was an abuse,” Maxava’s lawyers wrote.

Maxava says Vision has taken too long to turn over documents and emails that it is legally required to submit. The company requested that it turn over every email by Vision’s sales and marketing personnel that contains one of the following terms: maximum availability, max av, maxav, no max, and nomax. Maxava’s rationale for the request is that it accidentally discovered the alleged false statements that Vision made to three of its prospects in the first place, and it needs to see if there were more.

“By all appearances,” Maxava’s lawyers wrote in February, “Vision refuses to collect and/or disclose its documents or information because they will reveal the devastating evidence of Vision’s purposeful, planned, coordinated, and widespread competitive misconduct toward Maximum that exists in Vision’s files, and the full scope of the impact Vision’s misconduct has had on Maximum’s business.” Maxava changed its name from Maximum Availability last year, but uses its old name in court filings.

Vision’s lawyers, meanwhile, contend that Maxava’s discovery requests are overly broad, and that the company is in effect using discovery as a fishing expedition to bolster its case. “It is not ‘hiding’ any information, it has simply asserted rational objections to Maximum’s apparent belief that the filing of a federal lawsuit, particularly one with so little at stake, entitles the plaintiff to engage in limitless discovery.” (Vision contends that Maxava has only proven the loss of one customer, Cleveland Golf, which carried a value of less than $10,000.)

Vision, which offered to cross-reference its list of customers or prospects with Maxava’s to cut down on the work (Maxava declined), says it’s nonetheless working to comply with the discovery order. “At the end of the day, Vision’s production will include every relevant document that mentions Maximum,” the company says in a court filing. Vision says it has already spent 700 attorney hours reviewing 34,500 emails that contain more than 200,000 pages, a process that it labels “obviously inefficient and incredibly expensive.”

Vision says Maxava will get copies of the relevant portions of those emails–sent by sales and marketing personnel in the United States–before the pertinent hearing date. Communication with overseas employees will not be included because “nothing said to a non-U.S. customer is relevant to these proceedings,” Vision says in a filing. Maxava contests that claim.

As a result of the disagreements over the discovery process, the court has pushed the deadline for finishing discovery from April to June. The court is still scheduled to hold a trial on July 26. But at the pace things are going, it seems likely that the trial will be pushed back, too.