Case Report – Proprietary rights weigh against non-party production order

26 Mar

On March 18, the Perell J. of the Ontario Superior Court of Justice dismissed a motion for non-party production. In doing so, he made some notable comments about how to weigh the interests of non-parties whose information is sought by parties to litigation.

The plaintiffs in a proposed class action sought production from an automotive sector market research company. Their expert obtained the data under an academic license and used it to prepare an opinion supporting allegations that General Motors, the defendant, had engaged in anti-competitive behavior. The non-party research company claimed that the expert had breached his license, that its reputation was built on independence and that would be harmed if its data was allowed to be used against industry members, including its customer General Motors.

Perell J. dismissed the motion based on a finding that the plaintiffs did not prove necessity. He said, “all they have proven is that they must find another way to prove that they have a way to satisfy some of the criteria for certification.” He went on, however, to consider the fairness component of the test for production and gave heavy recognition to the market research company’s direct proprietary interest in the data. Perell J. said:

I appreciate that the court has the power and has exercised it to take away a non-party’s rights of property and privacy, but, in my opinion, the exercise of the power to compel production must be rare when a non-party wishes to assert its property and privacy rights as opposed to objecting merely on the grounds that the information it has is irrelevant to the proceedings or on the grounds that it would simply be bothered or inconvenienced by producing the information.

In some cases, a non-party may simply have the property right of possession over such things as banking records, accounting records, medical records, minutes of meetings, contractual documents, deeds and certificates of ownership, etc., and in those instances a court may be more ready to exercise its power, but in the case at bar, JATO has valuable proprietary rights that go beyond possession and rather the property being sought is its stock in trade and its forced sale of its products may harm JATO’s goodwill.

The last paragraph is more likely about the distinction between information with commercial value and information with operational value than a comment on the ability to access non-party records that one possesses on behalf of others who have a personal privacy interest in the records.

Tetefsky v. General Motors Corp., 2010 ONSC 1675 (CanLII).

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