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Case 3:15-mc-00427-HZ

Document 1

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Robert C. Weaver, Jr., OSB #801350


E-Mail: rweaver@gsblaw.com
Paul H. Trinchero, OSB #014397
E-Mail: ptrinchero@gsblaw.com
Eryn Karpinski Hoerster, OSB #106126
E-Mail: ehoerster@gsblaw.com
Garvey Schubert Barer
Eleventh Floor
121 SW Morrison Street
Portland, Oregon 97204-3141
Telephone: (503) 228-3939
Facsimile: (503) 226-0259

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FILED24 AUG '1516:31LISDCORP

UNITED STATES DISTRICT COURT


DISTRICT OF OREGON
PORTLAND DIVISION

UNITED STATES OF AMERICA, ex rel.


FLOYD LANDIS,
Plaintiff,
V.

TAILWIND SPORTS CORP., TAILWIND


SPORTS LLC, LANCE ARMSTRONG, and
JOHAN BRUYNEEL,
Defendants.

Case No.

'15-MC-427
---------

PRINCIPAL CASE PENDING IN THE


UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA,
CIVIL ACTION NO. 1:10-CV-00976CRC
MOTIONS FOR PROTECTIVE
ORDER AND TO MODIFY
SUBPOENAS ISSUED BY THE
UNITED STATES OF AMERICA AND
LANCE ARMSTRONG
EXPEDITED HEARING REQUESTED
REQUEST FOR ORAL ARGUMENT

MOTIONS FOR PROTECTIVE ORDER AND TO MODIFY SUBPOENAS


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LR 7-1 CERTIFICATION

In compliance with Local Rule 7-1, counsel for NIKE, Inc. ("NIKE") made a good faith
effort through telephone conferences with counsel for Plaintiff United States of America (the
"Government") and Defendant Lance Armstrong ("Armstrong") to resolve the discovery
disputes raised in these motions, and the parties were unable to do so.
NIKE, the Government and Armstrong have agreed to an expedited briefing schedule and
respectfully request that a hearing on this matter be set for the week of September 8, 2015.
NIKE is separately filing an unopposed motion to file this overlength brief and set the agreed
upon expedited briefing schedule.
MOTIONS FOR PROTECTIVE ORDER AND TO MODIFY SUBPOENAS

NIKE brings this miscellaneous action seeking a protective order and to modify the
subpoenas for deposition testimony and document production served upon it by Plaintiff United
States of America and Defendant Lance Armstrong in a False Claims Act qui tam action pending
in the United States District Court for the District of Columbia, Civil Action No. 1: 10-CV00976-CRC (the "FCA Litigation"). The FCA Litigation involves claims by the relator and
Government against individuals and entities accused of making false statements in conjunction
with the submission of claims for payment under professional cycling team sponsorship
agreements with the United States Postal Service ("USPS"). Specifically, the Government
alleges the Defendants' claims were false because the Defendants failed to disclose widespread
violations of the anti-doping provisions contained in USPS sponsorship agreements for the U.S.
Postal Service Pro Cycling Team ("USPS Team") and USPS's general contracting policies.
Based on Defendants' failure to disclose and false denials of the USPS Team's doping activities,
the Government seeks to recover money the USPS paid under the sponsorship agreements plus
treble damages and penalties. In his defense, Armstrong alleges that the Government suffered no
damages because the USPS realized financial benefits from its sponsorship agreements with
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Defendants.
Both the Government and Armstrong have now served subpoenas for testimony and
documents on third-party NIKE, a stranger to the USPS sponsorship agreements. Because
NIKE' s compliance is required within the District of Oregon, jurisdiction over this motion is
proper in this District pursuant to Fed. R. Civ. P. 45(d)(3) and 26(c)(l). NIKE herein moves for
modification of the subpoenas and for a protective order limiting discovery on the following
bases:
1.

The information requested from NIKE in the form of deposition testimony and

document production is not relevant to any claim or defense in the FCA Litigation, and therefore
not discoverable under Fed. R. Civ. P. 26(b)(l);
2.

The information requested from NIKE in the form of deposition testimony and

document production is overly broad as to time to the extent is seeks documents and information
after the termination ofUSPS's sponsorship of the USPS Team effective December 31, 2004,
and therefore information and documents after that date is not discoverable under Fed. R. Civ. P.
26(b)(l);
3.

Responding to the subpoenas would require NIKE to disclose trade secrets or

highly sensitive proprietary and commercial information, and should therefore be modified to
prevent such disclosure under Fed. R. Civ. P. 45(d)(3)(B)(i); and
4.

Responding to the subpoenas would impose a burden or expense on NIKE that

outweighs its likely benefit, pursuant to Fed. R. Civ. P. 26(b)(2)(iii) and will subject NIKE to an
undue burden under Fed. R. Civ. P. 45(d)(3)(A)(iv).
In the event that this Motion is denied, in whole or in part, as to the subpoena issued on
behalf of Armstrong, NIKE request that a protective order be entered setting the date for the
production of responsive documents and deposition at least thirty (30) days after the Court's
ruling on this Motion. This additional time is required for NIKE to review the voluminous
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documents necessary to respond to Armstrong's subpoena and to designate and prepare


witness( es) for deposition.
In support of this Motion, NIKE relies upon the record in the FCA Litigation, the
Memorandum of Law in Support of NIKE, Inc.'s Motions for Protective Order and to Modify
Subpoenas below, and the declarations of Robert C. Weaver, Jr., Mary VanderWeele and
Carolyn Gutsick filed herewith.

MEMORANDUM OF LAW IN SUPPORT OF NIKE, INC.'S


MOTIONS TO MODIFY SUBPOENAS AND FOR PROTECTIVE ORDER
II.

BACKGROUND
A.

FCA Litigation.

Defendant Armstrong is a former professional cyclist and athlete who competed actively
between 1992 and 2011. During his career, Armstrong was a member of corporate-sponsored
cycling teams, including as a member of the "US Postal Service Pro Cycling Team" which was
sponsored by the USPS. The USPS, as an "independent establishment" of the United States
government, began sponsoring the U.S. Postal Service Cycling Team (the "USPS Team") on
October 1, 1995, and Armstrongjoined the team in 1998. See Declaration of Robert C. Weaver,
Jr. ("Weaver Deel."), Ex. 1 (Second Amended Complaint), i!i! 22, 23, 26. 1 The USPS ended it
sponsorship of the USPS Team effective December 31, 2004. Id,

i! 32.

Armstrong also secured

corporate sponsorships as an individual athlete throughout his career. As relevant to this motion,
NIKE sponsored Armstrong for many years, ultimately terminating its sponsorship in 2012. 2
The Government alleges that the USPS's sponsorship of the USPS Team was highly
lucrative for its owners and the athletes. For example, the Complaint alleges that "[b ]etween
1

All references to Exhibits herein ("Ex.") refer to the exhibits to the Declaration of Robert C.
Weaver, Jr., filed herewith.
2

NIKE announced the termination of its contract with Armstrong on October 17, 2012 in a
public statement posted on its website, http://news.nike.com/news/nike-statement-on-lancearmstrong (accessed on August 22, 2015).
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January 1, 2001 and October 20, 2004, at least $31,442,262.57 was paid by the USPS" to
Defendants. Id.,

if 33.

"Defendants were also paid more than $10.9 million in 2000 and earlier,

pursuant to the payment terms of the 1995 Sponsorship Agreement. ... " Id.,

if 35.

In response,

Armstrong alleges that the USPS itself realized over $13 5 million in tangible economic benefits
from the sponsorship. Ex. 2 (Armstrong's Answer), p. 1.
The Complaint alleges that both the USPS 1995 Sponsorship Agreement and USPS 2000
Sponsorship Agreement, pursuant to which the United States made payments to Defendants,
prohibited "doping" by the athletes - i.e., the use of prohibited substances or prohibited methods
to increase athletic performance. Ex. 1, iii! 36-37. It also alleges that the USPS's general
contracting policy applicable to all persons performing services under a USPS contract
prohibited the illegal use of drugs and furthermore stated that "persons who knowingly submit
false data or conceal data for the purpose of gaining employment" are ineligible to perform
services under a USPS contract. Id.,

if 38; see id., iii! 39-40.

The Government's False Claims Act case arises out of evidence that Armstrong and the
other defendants secretly violated doping prohibitions, which were material terms to the
sponsorship agreements. This evidence came to light many years after the termination of the
agreements. On or about October 10, 2012, the United States Anti-Doping Agency (USADA), a
national anti-doping organization for the Olympic Movement in the United States, "issued a
comprehensive Reasoned Decision ... which concluded that 'the US Postal Service Pro Cycling
Team ran the most sophisticated, professionalized and successful doping program that sport has
ever seen."' Ex. 1, if 224. In January 2013, after a 20-year professional cycling career,
Armstrong admitted to blood doping and the use of performance enhancing drugs in a televised
interview with Oprah Winfrey. Id.,

if 225; see Ex. 2, if 111

("Defendant admits that he and other

USPS riders used performance enhancing substances from at least 1998 through 2004 .... ").
The Government, through qui tam relator and former USPS Team member Floyd Landis
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("Landis" or "relater"), filed suit under the False Claims Act seeking civil penalties and damages
from Defendants, including Armstrong in his individual capacity, based on claims made to the
Government with respect to the USPS sponsorship. Relator's initial complaint was filed under
seal on June 10, 2010 and the case was unsealed on February 22, 2013, when notice of the
Government's intention to intervene was made public. FCA Litigation Docket, ECF Nos. 42 &
43.

B.

2010 Federal Grand Jury Subpoena.

In 2010, NIKE received a Federal Grand Jury Subpoena issued by the United States
Attorney for the Central District of California seeking contracts, agreements, and similar
documents related to NIKE's sponsorship of professional cycling teams and riders for
professional cycling teams. Weaver Deel., ~9. In addition, the subpoena sought all the
documents relating to the use of performance enhancing drugs by anyone affiliated with certain
professional cycling teams. Id. In response, NIKE produced documents responsive to the
Federal Grand Jury Subpoena with the assurance from the Government that it would keep the
documents confidential. After the Government declined to prosecute Armstrong in 2012, NIKE
requested the return of the documents it produced in 2010. Id.,

~10.

The Government refused

and in 2014 advised NIKE that at least some of the documents were produced to Armstrong in
the FCA Litigation in response to a Motion to Compel. Id.,

~11.

opportunity to object to the production of those documents. Id.,

NIKE was not given a formal

~12.

Had NIKE had the

opportunity, it would have formally raised the same relevance objections made herein. Id.,

~~12-

13.

C.

FCA Litigation Subpoenas.

Counsel for NIKE was served with a deposition and document subpoena by the
Government on July 30, 2015 (the "Government Subpoena")-with less than two months to go

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before the discovery cut-off. 3 Ex. 3. NIKE timely served Responses and Objections to the
Government Subpoena on August 13, 2015. Ex. 4. NIKE was served a deposition and document
subpoena issued by Armstrong's counsel on August 5, 2015 - also critically near the deadline for
discovery in a case that has gone on for years - and NIKE served responses and objections to
that subpoena on August 13, 2015. Weaver Deel.,~ 5. On August 13, 2015, Armstrong served
NIKE with an amended subpoena ("Amended Armstrong Subpoena"). Ex. 5. The Amended
Armstrong Subpoena replaced the August 5 Subpoena, removing and/or combining several
categories of deposition topics and document requests. Weaver Deel.,

6. NIKE served its

Responses and Objections to the Amended Armstrong Subpoena on August 24, 2015. Ex. 6.

III.

ARGUMENT
A.

LEGALSTANDARDS

"On timely motion, the court for the district where compliance is required must quash or
modify a subpoena that: (i) fails to allow a reasonable time to comply; ... or (iv) subjects a
person to undue burden." Fed. R. Civ. P. 45(d)(3)(A) (emphasis added). "To protect a person
subject to or affected by a subpoena, the court for the district where compliance is required may,
on motion, quash or modify the subpoena if it requires: (i) disclosing a trade secret or other
confidential research, development or commercial information.... " Fed. R. Civ. P. 45(d)(3)(B)
(emphasis added).
Additionally, with respect to "matters relating to a deposition," the court where the
deposition will be taken may enter a protective order to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or expense, including one or more of
3

The Government and Armstrong advised NIKE that the discovery cutoff was September 15,
2015, until the parties recently secured an extension until September 25, 2015. For reference,
this case was originally filed on June 10, 2010, unsealed on February 22, 2013, and and
Government intervened on April 23, 2013. The parties have had years to request documents and
information from NIKE but have waited until the last minute for reasons unknown. Now those
same parties are demanding documents and a 30(b)(6) deposition from NIKE with minimal
notice and time to respond.
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the following: ... (B) specifying terms, including time and place, for the disclosure or discovery;
... (D) forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to
certain matters; ... [or] (G) requiring that a trade secret or other confidential research,
development, or commercial information not be revealed or be revealed only in a specified way ..

Fed. R. Civ. P. 26(c)(l).


Modification of a subpoena and the issuance of a protective order is particularly
appropriate where the subpoena requests information that is not within the scope of discovery
allowed under Rule 26, which limits discovery to relevant information.
Further, it is well established that the scope of discovery under a subpoena issued
pursuant to Rule 45 is the same as the scope of discovery allowed under Rule
26(b )(1 ). Rule 26(b )(1) provides that "[p ]arties may obtain discovery regarding
any nonprivileged matter that is relevant to any party's claim or defense."
However, the court must limit such discovery if "the burden ... of the proposed
discovery outweighs its likely benefit." Fed. R. Civ. P. 26(b)(2)(C)(iii).
In re Suzuki, Civ. No. 14-00516 JMS-KSC, 2014 WL 6908384, *1 (D. Haw. Dec. 5, 2014)
(citations, quotation marks and brackets omitted).
In the Ninth Circuit, the relevance of a particular discovery request must be established
by the propounding party in the face of a motion to quash or modify subpoena. While it is
generally "well established that the party [moving to quash a subpoena] bears the burden of
showing why a discovery request should be denied," 4 "the party issuing the subpoena must [first]
demonstrate the discovery sought is relevant." 5
4

Wells Fargo Bank, NA. v. Jny, No. 2:13-cv-01561-MMD-NJK, 2014 WL 1796216, *4 (D. Nev.
May 6, 2014) (quoting Painters Joint Comm. V. Emp. Painters Trust Health & Welfare Fund,
No. 2:10-cv-01385-JCM-PAL, 2011WL4573349, *5 (D. Nev. Sept. 29, 2011) (citing
Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975))).
5

Chevron Corp. v. Danziger, No. 12-mc-80237 CRB (NC), 2013 WL 4536808, *4 (N.D. Cal.
Aug. 22, 2013); see Refco Grp. Ltd. v. Cantor Fitzgerald, L.P., No. 13 Civ. 1654 (RA)(HBP),
2014 WL 5420225, *6 (S.D.N.Y. Oct. 24, 2014) ("Once the party seeking production of the
materials meets its burden of showing relevance sufficient to justify discovery, the burden shifts
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B.

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THE AMENDED ARMSTRONG SUBPOENA SHOULD BE MODIFIED


AND A PROTECTIVE ORDER ENTERED.

The Court should significantly modify the Amended Armstrong Subpoena, and enter a
protective order "forbidding inquiry into certain matters, or limiting the scope of disclosure or
discovery to certain matters." Fed. R. Civ. P. 26(c)(l)(D). Many of the requested documents
and topics identified for tesiimony are not relevant to the claims and defenses raised in the
litigation. Moreover, the requested documents are overbroad to the extent they seek information
beyond December 31, 2004 - the date USPS terminated its sponsorship of the USPS Team.
Even ifthe requests sought relevant information, responding to the Amended Subpoena would
require the disclosure of trade secrets or confidential commercial information, and would be
unduly burdensome to NIKE.
The Amended Armstrong Subpoena on NIKE consists of a command to designate a
person or persons to testify at a deposition on NIKE's behalf on seven topics and a
corresponding request for seven categories of documents. See Ex 5. The categories of
information requested by Armstrong include:

Financial benefits, revenue, profits or sales of merchandise realized by NIKE from its
sponsorship of Armstrong, Livestrong, or the USPS Team, or use of Armstrong's name
or likeness or the USPS Team logo (Deposition Topics No. 1, 2, 6, 7; Request for
Production Nos. 1, 2, 3 );

NIKE's internal financial evaluations of such sponsorships or sponsored entities


(Deposition Topic No. 3; Request for Production No. 4);

Communications relating to NIKE's sponsorship agreements with Armstrong,


Livestrong, or Tail Wind, Inc. (Request for Production No. 5);

to the movant to show why discovery should not be had.") (citations, quotation marks and
brackets omitted). "[W]hile discovery is a valuable right and should not be unnecessarily
restricted ... , the 'necessary' restriction may be broader when a nonparty is the target of
discovery." Dart Indus. Co. v. Westwood Chem. Co., 649 F.2d 646, 649 (9th Cir. 1980); See
also R. Prasad Indus. V. Flat Irons Envtl. Solutions Corp., No. CV-12-08261-PCT-JAT, 2014
WL 2804276, *2 (D. Ariz. June 20, 2014) ("To obtain discovery from a nonparty, a party must
demonstrate that its need for discovery outweighs the nonparty's interest in nondisclosure.").
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Contracts and agreements between NIKE and the USPS or payments made by NIKE to
the USPS relating to the USPS Team (Deposition Topics No. 4, 5; Request for
Production No. 6) 6 ; and

Documents previously produced by NIKE in response to any other subpoena, civil


investigative demand or request in connection with this case (Request for Production No.
7).
NIKE served its responses and objections to the Amended Armstrong Subpoena on

August 24, 2015. Ex. 6.

1.

The Amended Armstrong Subpoena Requests Information Not


Relevant to any Claim or Defense Raised in the FCA Litigation.

The deposition topics and document requests related to (1) financial benefits realized by
NIKE from its sponsorship of Armstrong, Livestrong, and the USPS Team, or use of
Armstrong's name or likeness or the USPS Team logo, (2) NIKE's internal financial evaluations
of such sponsorships or sponsored entities, and (3) communications relating to NIKE's
sponsorship of Armstrong and his related entities, are not relevant to any claim or defense raised
in the FCA Litigation. Because Armstrong will not be able to demonstrate any relevance as to
these categories of deposition topics, the Amended Armstrong Subpoena should be modified to
remove these categories - specifically, Deposition Topics Nos. 1, 2, 3, 6 and 7, and Requests for
Production Nos. 1-5. See Chevron Corp., 2013 WL 4536808 at *4 ("the party issuing the
subpoena must [first] demonstrate the discovery sought is relevant.").
The Amended Armstrong Subpoena seeks NIKE's financial information, evaluations, and
sponsorship-related communications to support his defense that the Government did not suffer
any financial damage as a result of its Sponsorship Agreements with the USPS Team
notwithstanding the alleged false statements or omissions regarding doping by Armstrong or
other members of the USPS Team. See Ex. 2, p. 1 ("[the] tangible economic benefits to the

As stated in its responses and objections to the Amended Armstrong Subpoena, NIKE does not
have any record reflecting any contract with USPS or any royalty payments made to USPS
relating to its sponsorship USPS Team. See Ex., 6.
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USPS exceeded $135 million - representing more than a 3X return on the investment, and
rendering the USPS' s current claim of economic harm arising from the sponsorship spurious and
false."); see also id., p. 33 (Armstrong's Eighth and Ninth Affirmative Defense alleging that the
Relator and the Government have suffered no injury). However, NIKE's financial benefit, if
any, gained from its sponsorship of the USPS Team, Armstrong or his related entities has no
factual or logical relationship to the financial benefit USPS may have enjoyed from its
sponsorship of the USPS Team. As a general matter, information related to one sponsor's return
on investment is not relevant to a second sponsor's return on investment because the success of
the campaign relies on the actions and individual characteristics of each sponsor. More
specifically, NIKE is in the business of selling athletic apparel and merchandise, and relies on
sponsorship of athletes and product placement as part of its business model. USPS, on the other
hand, is in the business of postal delivery services and sponsorship of an athletic team is not part
of its core business model. Any comparison between USPS's and NIKE's experience related to
sponsorship of Armstrong or the USPS is simply not relevant to any claim or defense raised by
the parties in the FCA Litigation. Put another way, nothing discovered from NIKE pursuant to
Armstrong's requests will tend to make its defense that the USPS reaped a benefit from its own
sponsorship of Armstrong or the USPS Team more or less probable. An "analogy of benefits" is
simply of no consequence here. See, Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318,
1323 (F.C. 1990)(quashing subpoena to nonparty competitor on grounds competitor's financial
records were not relevant to prove plaintiffs claim for lost profits in patent infringement case).
Nor will prying into NIKE's negotiation, evaluation and financial return from its sponsorship of
the USPS Team, Armstrong and his related entities lead to the discovery of admissible evidence
relevant to any claim or defense. Therefore, NIKE should be relieved from the obligation to
respond to Deposition Topics Nos. 1, 2, 3, 6 and 7, and Requests for Production Nos. 1-5 in the
Armstrong Subpoena pursuant to Fed. R. Civ. P. 26(c)(l)(D) and 45(c)(3).
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The Amended Armstrong Subpoena is Overbroad as to Time.

The Amended Armstrong Subpoena is overbroad as to time to the extent it seeks


documents or information beyond December 31, 2004. Although the requests seek all
responsive information and documents from 1995 to the present, the USPS sponsorship
agreements with the USPS Team were only in effect from October 1, 1995 through December
31, 2004. Ex. 1, ~~ 23, 32. A request for the financial, evaluative, and sponsorship-related
documents and communications requested by the Armstrong Amended Subpoena beyond
December 31, 2004, is overbroad by more than a decade, and Armstrong knows this. Indeed, in
a 2014 filing in the FCA Litigation, Armstrong opposed the relator's attempt to discover
information and documents relating to events after 2004, arguing that the requests were
"overbroad" because they sought information from a time "when the government was not even

sponsoring a U.S. Postal Service team." Ex. 7 (Armstrong's Response to Relator's Request for
Issuance of Letters Rogatory), p. 2 (emphasis added). Even if Armstrong's argument - that
NIKE's purported benefit from its sponsorship of Armstrong is relevant to whether the USPS
gained a benefit - was valid, which it is not, there is nothing outside the 1995-2004 time period
that is even related to Armstrong's "benefit by analogy" position.

3.

Responding to the Amended Armstrong Subpoena Would Require


NIKE to Disclose Its Trade Secrets and/or Confidential Commercial
Information.

Pursuant to Fed. R. Civ. P. 45(d)(3)(B)(i), the Court may modify a subpoena if it requires
the responding party to "disclos[e] a trade secret or other confidential research, development, or
commercial information." Responding to the Amended Armstrong Subpoena's requests seeking
NIKE's financial information, internal evaluations, and communications relating to NIKE's
sponsorship of the USPS Team, Armstrong and his affiliates (Deposition Topic Nos. 1, 2, 3, 6,
and 7; Request for Production Nos. 1-5) would require NIKE to disclose trade secrets or other

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highly sensitive proprietary and commercial information. The Oregon Uniform Trade Secrets
Act defines a trade secret as
information, including a drawing, cost data, customer list, formula, pattern,
compilation, program, device, method, technique or process that: (a) Derives
independent economic value, actual or potential, from not being generally known
to the public or to other persons who can obtain economic value from its
disclosure or use; and (b) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
ORS 646.461(4). The information sought by the Armstrong Amended Subpoena would
necessarily disclose if and how NIKE tracks financial returns and benefits from sponsorship
agreements with athletes, which constitute trade secrets under Oregon law. NIKE takes
considerable effort to maintain the secrecy of its records regarding athlete sponsorships and the
value derived therefrom, and those records are not generally known to other industry-members,
members who could obtain economic value from their disclosure or use. See Vesta Corp. v.
Amdocs Mgmt. Ltd., No. 3:14-cv-1142-HZ, 2015 WL 163384,

* 11 (D. Or. Jan.

13, 2015)

("Plaintiffs Risk Information description of 'detailed statistical information' about the


'prevalence of fraudulent payment transactions in the prepaid mobile device marketplace' that
Plaintiff had compiled over 20 years reflects the kind of compilation that courts in this district
and in Oregon state court have recognized as a trade secret."). NIKE's information, documents,
and communications related to its financial performance resulting from sponsorship agreements,
and internal evaluations thereof, constitute trade secrets because such information contains the
confidential strategies and processes that NIKE utilizes in acquiring athlete endorsements and in
contracting with those athletes. See Declaration of Mary VanderWeele ("VanderWeele Deel."),
~~

7-8. A response to Armstrong's subpoena would contain organizational, funding, strategic,

and other operating information regarding the proprietary business model NIKE uses in its
sponsorship efforts. Id.,

~~

7-8, 10. This information is a trade secret because NIKE's ability to

capitalize on sponsorship agreements with athletes has been a source of tremendous investment

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over a matter of decades, and is kept highly confidential. Id.,

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iii! 9-11.

Even if the Court were not inclined to find the requested information to consist of trade
secrets, such information should still not be disclosed because it contains confidential
commercial information that would indisputably: (1) harm NIKE's competitive standing in the
athlete endorsement industry; (2) represent a windfall to NIKE's competitors; and (3) has little, if
any, probative value to the underlying dispute between the Government and Armstrong. Id.,

iii!

7-11. In this case, where NIKE is neither a party nor even has any active involvement in the
dispute, the lack of probative value far outweighs Armstrong's need for the evidence. See Dart
Indus. Co., 649 F.2d at 649 ("while discovery is a valuable right and should not be unnecessarily

restricted ... , the 'necessary' restriction may be broader when a nonparty is the target of
discovery."; R. Prasad Indus., 2014 WL 2804276 at *2 ("To obtain discovery from a nonparty, a
party must demonstrate that its need for discovery outweighs the nonparty's interest in
nondisclosure."). Even with the Protective Order that is in place to prevent public disclosure,
NIKE will not be sufficiently involved in future stages of litigation to monitor and enforce the
Protective Order to ensure that its trade secrets or valuable confidential commercial information
is not disclosed inadvertently by the parties in the FCA Litigation. See Allen v. Howmedica
Leibeinger, GmhH, 190 F.R.D. 518, 526 (W.D. Tenn. 1999)(finding that a protective order

would be insufficient to protect nonparty's interests in trade secrets where parties would have
little incentive to protect nonparty's interests).
Therefore, under Fed. R. Civ. P. 45(d)(3)(B)(i), the Court should modify the Amended
Armstrong Subpoena to remove Deposition Topic Nos. 1, 2, 3, 6, and 7 and Request for
Production Nos. 1-5 on the grounds that they seek the disclosure of trade secrets and/or
confidential commercial information. In addition, NIKE requests that a protective order be
entered under Fed. R. Civ. P. 26(c)(l)(D) and (G) so limiting the scope of allowable discovery as
to these matters.
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Responding to the Amended Armstrong Subpoena Will Subject NIKE


to an Undue Burden that Outweighs its Likely Benefit to Armstrong.

Under Fed. R. Civ. P. 45(d)(3)(A)(iv), a court must modify a subpoena that "subjects a
person to undue burden." In this case, the Armstrong's financial, evaluative, and communication
requests are temporally overbroad, seeking information and documents over a 20-year period
from at least 1995 to present. Responding to the Amended Armstrong Subpoena will subject
NIKE to an undue burden in that it will require NIKE to search for and review large volumes of
communications and documents relating to day-to-day operations and administration of the
sponsorship agreements. Declaration of Carolyn Gutsick ("Gutsick Deel."), ~ 3. This burden both in time and expense - upon a non-party to the underlying action is unwarranted.
Further, responding to the Amended Armstrong Subpoena will impose a burden or
expense on NIKE that outweighs its likely benefit to Armstrong. As discussed above, the
information related to NIKE's financial benefits from the sponsorship of Armstrong, its internal
evaluations thereof, and communications related thereto, have no relevance to Armstrong's
defenses in the underlying litigation. Therefore, under Fed. R. Civ. P. 45(d)(3)(A)(iv) and Fed.
R. Civ. P. 26(b)(2)(C)(iii), the Court should modify the Amended Armstrong Subpoena to
remove Deposition Topic Nos. 1, 2, 3, 6, and 7 and Request for Production Nos. 1-5 as imposing
an undue burden on non-party NIKE. NIKE also requests that a protective order be entered
under Fed. R. Civ. P. 26(c)(l)(D) limiting the scope of allowable discovery as to these matters.
C.

THE GOVERNMENT SUBPOENA SHOULD LIKEWISE BE MODIFIED

Although the Government Subpoena is narrower than the Amended Armstrong


Subpoena, it likewise seeks irrelevant and trade secret information not subject to discovery under
Rules 26 and 45. The Court should significantly modify the Government Subpoena and enter a
protective order "forbidding inquiry into certain matters, or limiting the scope of disclosure or
discovery to certain matters." Fed. R. Civ. P. 26(c)(l)(D). With the exception ofrequests
related to NIKE's search for and authenticity of documents previously produced, the requested
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documents and deposition topics should be modified for three reasons. First, the documents
sought and designated topics are not relevant to any claim or defense raised in the FCA
Litigation. Second, the requests are overly broad to the extent they seek documents and
information beyond December 31, 2004 - the date USPS terminated its sponsorship of the USPS
Team. Third, even ifthe requests sought relevant information, responding to the Government
Subpoena would unnecessarily require the disclosure of trade secrets or confidential commercial
information.
On July 30, 2015, the Government served its subpoena on NIKE, consisting of a
command to designate a person or persons to testify at a deposition on NIKE's behalf on eight
topics, and a corresponding request for six categories of documents. See Ex. 3 (Government
Subpoena). The categories of information requested by the Government include:

Information, documents, communications with Armstrong, and statements to the media


related to NIKE's sponsorship of Armstrong, including those related to the negotiation
and termination of the sponsorship (Deposition Topic Nos. 1-5; Request for Production
Nos. 1, 3, and 6);

Documents related to payments from NIKE to Armstrong (Request for Production No.
2);

Communications between NIKE and Armstrong related to Armstrong's use or allegations


of his use of performance enhancing or prohibited substances (Deposition Topic No. 6;
Request for Production Nos. 4 and 5); and

NIKE's search for documents responsive to the Government Subpoena or the 2010 Grand
Jury subpoena in a criminal investigation into Armstrong, and the authenticity of the
documents produced in response to the Grand Jury subpoena (Deposition Topic Nos. 7
and 8).
NIKE served its responses and objections to the Government Subpoena on August 13,

2015. Ex. 4. 7
7

NIKE has agreed to produce a deposition witness to testify on Deposition Topic Nos. 7 and 8
related to NIKE's search for documents responsive to the Government Subpoena or the 2010
Grand Jury subpoena, and regarding the authenticity of the documents produced in response to
the Grand Jury subpoena. See Ex. 4 (Response to Government Subpoena).
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The Government Subpoena Requests Information Not Relevant to


any Claim or Defense in the Parties' Underlying Action.

NIKE's agreements with Armstrong, including without limitation communications


relating to the negotiation and termination of NIKE's agreements with Armstrong, are not
relevant to any claim or defense raised in the FCA Litigation. See Ex. 3, Deposition Topics 1-4;
Document Requests 1 & 3. The FCA Litigation centers on the USPS sponsorship agreements for
the USPS Team. NIKE is not a party to those agreements, nor is USPS a party to NIKE's
agreements with Armstrong. NIKE's communications with Armstrong exchanged in
negotiating, executing and terminating NIKE's separate agreements with Armstrong bear no
relationship to the issues in FCA Litigation. 8 As these communications are not relevant to the
FCA Litigation, the Government Subpoena should be modified to strike Deposition Topics 1-4
and Document Requests 1 & 3.
Likewise, the Government's requests for documents reflecting payments to Armstrong
pursuant to NIKE's sponsorship agreements with Armstrong have no bearing on whether
Armstrong presented a false claim to the Government. See Ex. 3, Deposition Topic No.1,
Document Request No. 2. There is simply no probative value in the documents sought by the
Government in these requests, and nothing produced would tend to support or undercut the
Government's theory ofliability. Thus, the Government Subpoena should be modified to strike
Deposition Topic 1 and Document Request No. 2.
The Government also seeks testimony and documents reflecting any communications
between NIKE and Armstrong regarding Armstrong's alleged or actual use of prohibited

As explained in Section II.B, the Government is in possession of the documents NIKE


produced in response to the 2010 Federal Grand Jury Subpoena. Because NIKE's production in
the criminal investigation was for a different purpose and with an agreement with the
Government that the documents would remain confidential, NIKE has not waived its position
herein that the documents previously produced are not relevant to the claims and defenses in the
FCA Litigation, nor that the produced documents continue to constitute protectable trade secrets.
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substances or methods. Ex. 3, Deposition Topic 6, Document Requests 4 & 5. These requests
are not relevant to the FCA Litigation because NIKE's lack of knowledge of Armstrong's doping
activities during the term of the USPS sponsorship agreement - 1995-2004 - does not make it
more or less probable that the USPS was aware of Armstrong's doping during that same time
period. Moreover, Armstrong has admitted to using performance enhancing drugs and to
publicly denying his use of performance enhancing drugs in past public statements. Ans.,

~~

88-

89, 110-112, 121 & 130. For this reason the Government Subpoena should be modified to strike
Deposition Topic 6 and Document Request No. 4 & 5.

2.

The Government Subpoena Requests for Information and Documents


are Overly Broad as to Time.

The Government Subpoena covers information and documents created, used or relied
upon from January 1, 1998 through the present. The USPS sponsorship of the USPS Team
ended on December 31, 2004. The Government's requests are overly broad to the extent that
they seek information and documents beyond December 31, 2004. NIKE's agreements and
communications with Armstrong after 2004 do not have any relevance to USPS' s claims arising
from sponsorship of the USPS Team and, therefore, are not discoverable under Fed. R. Civ. P.
26(b )(1 ).
For these reasons, ifthe Court requires NIKE to provide any testimony and documents in
response to Deposition Topic Nos. 1-6 and/or Document Request Nos. 1-6 in the Government
Subpoena, the relevant time period for such discovery should be limited to January 1, 1998
through December 31, 2004. Fed. R. Civ. P. 26(b)(l) and 26(c)(l)(D).

3.

Responding to the Government Subpoena Would Require NIKE to


Disclose Its Trade Secrets and/or Confidential Commercial
Information.

Disclosure of the terms, negotiations, communications, and payments related to NIKE's


sponsorship agreements with Armstrong would require NIKE to reveal its valuable trade secrets
and/or confidential commercial information. See, infra, Section III.B.3; VanderWeele

Deel.,~~

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6, 8-11. Therefore, under Fed. R. Civ. P. 45(d)(3)(B)(i), the court should issue an order
modifying the Government Subpoena to remove Deposition Topic Nos. 1-4 and Requests for
Production Nos. 1-3. These categories of requests seek the confidential terms ofNIKE's
sponsorship agreements with Armstrong, together with related confidential communications and
negotiations between the contracting parties. NIKE's business strategies, pricing, and
contracting methods related to sponsorship agreements with athletes constitute highly valuable
trade secrets. Nike takes considerable effort to maintain the secrecy of its records regarding
athlete sponsorships and the value derived therefrom, and those records are not generally known
to other industry-members, members who could obtain economic value from their disclosure or
use. Id.,

iii! 10-11. 9

See Vesta Corp., 2015 WL 163384 at* 11. Even if not considered trade

secrets, the terms, negotiations, communications, and payments related to NIKE's sponsorship
agreements with Armstrong consist of highly value commercial information. For all the reasons
set forth in Section III.B.3 above, the Court should modify the Government Subpoena to remove
Deposition Topic Nos. 1-4 and Request for Production Nos. 1-3 as requiring the disclosure of
trade secrets and/or confidential commercial information. In addition, NIKE requests that a
protective order be entered under Fed. R. Civ. P. 26(c)(l)(D) and (G) limiting the scope of
allowable discovery as to these matters.

D.

PROTECTIVE ORDER AS TO TIMING OF DEPOSITION AND


PRODUCTION OF DOCUMENTS

If the Court denies NIKE's Motion as to the Amended Armstrong Subpoena, in whole or
in part, NIKE respectfully requests that the deadline for NIKE to produce documents and
designate and provide witnesses be set at least thirty (30) days after the Court's ruling on this

As discussed in footnote 8 above, the fact NIKE provided the Government with sponsorshiprelated information pursuant to a Federal Grand Jury Subpoena in 2010 did not waive NIKE's
right to claim trade secret protection over those materials under Oregon law.
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matter. 1 Counsel for Armstrong and the Government have represented that if the trial judge in
the underlying action in the District of Columbia allows discovery from NIKE to be continued
into the first week of October, 2015, they will not object to such a protective order. However,
regardless of the parties' consent or the trial judge's allowance of discovery to continue, NIKE
should not be required to comply with a subpoena that does not provide for sufficient time to
respond, and a protective order should issue.
As for the urgency the Government and Armstrong feel as a result of the September 25,
2015 discovery cut-off, the urgency is of their own making. The FCA Litigation was unsealed
on February 22, 2013. The fact that the Government and Armstrong waited until this late date to
seek discovery from NIKE - nearly two and a half years after the case was unsealed - should not
impinge on NIKE's right to have a sufficient period ohime to respond. It will take considerable
time for NIKE to gather responsive documents, designate witnesses and prepare those witnesses
to testify at deposition. Under Fed. R. Civ. P. 45(d)(3)(A)(i), the Court must quash or modify a
subpoena that "fails to allow a reasonable time to comply." See also Fed. R. Civ. P. 26(c)(l)
("The court may, for good cause, issue an order to protect a party or person from ... undue
burden or expense, including one or more of the following: ... (B) specifying terms, including
time and place, for the disclosure or discovery ... ").

IV.

CONCLUSION
At the eleventh hour, Armstrong and the Government have dragged non-party NIKE into

litigation that has been going on for years and for which NIKE can provide essentially no
relevant information. More importantly, much of the information sought by the parties
comprises trade secrets or, at the very least, confidential commercial information, including
proprietary sponsorship agreements, financial results and evaluations, and related
10

IfNIKE's Motion is granted as to the Amended Armstrong Subpoena, NIKE is capable of


complying with the Government's request to have a deposition held and documents produced in
response to the Government Subpoena by September 25, 2015.
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communications. This information should not be disclosed under any circumstance, and
especially in this case, where the vast majority of documents sought will provide little to no
probative value to the litigants.
NIKE therefore respectfully requests that the court modify the Amended Armstrong
Subpoena and Government Subpoena and enter a protective order forbidding inquiry into certain
matters, limiting the scope of disclosure or discovery, and specifying the terms, including time
and place, for the disclosure or discovery.
DATED this 24th day of August, 2015.
Respectfully submitted,
GARVEY SCHUBERT BARER

By

~r---I -~

.__

Robert C. Weaver, Jr., OSB # 801350


Telephone: (503) 228-3939
Fax: (503) 226-0259
E-Mail: rweaver@gsblaw.com
Paul H. Trinchero, OSB # 014397
Eryn Karpinski Hoerster, OSB # 106126

Certificate of Compliance
This brief complies with the applicable word count limit under LR 26-3(b) because
NIKE, Inc. has moved for an extension of the page limit and/or word count applicable to
Discovery Motions. The memorandum of law contains 5,790 words, including headings,
footnotes, and quotations, but excluding the caption, table, of contents, table of cases and
authorities, signature block, exhibits, and any certificates of counsel.

~~~
Robert C. Weaver, Jr., OSB # 801350
Telephone: (503) 228-3939
Fax: (503) 226-0259
E-Mail: rweaver@gsblaw.com
Paul H. Trinchero, OSB # 014397
Eryn Karpinski Hoerster, OSB # 106126
Attorneys for NIKE, Inc.
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CERTIFICATE OF SERVICE
I certify that I served a copy of NIKE, INC.'S MOTIONS FOR PROTECTIVE

ORDER AND TO MODIFY SUBPOENAS ISSUED BY THE UNITED STATES OF


AMERICA AND LANCE ARMSTRONG upon the recipients below via electronic mail and
US mail, on this 24th day of August, 2015.

Gregory A. Mason
U.S. Department of Justice
601 D Street NW, Room 9543
Washington, DC 20004
Gregory.A.Mason@usdoj.gov

Elizabeth McCloskey
Keker & Van Nest LLP
633 Battery Street
San Francisco, CA 94111
emccloskey@kvn.com

Attorneys for Plaintiff United States of


America

Attorneys for Defendant Lance Armstrong

Paul H. Trinchero, OSB # 014397

Attorneys for NIKE, Inc.

GSB:725873 l .6

CERTIFICATE OF SERVICE
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