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Fair Isaac Corp. v. Experian Inform'n Sol'ns, Inc.: US District Court :DISCOVERY - no showing of substantial need for materials; denial of motion to compel stands

Fair Isaac Corporation and
myFICO Consumer Services, Inc.,
Civil No. 06-4112 ADM/JSM
Experian Information Solutions Inc.;
Trans Union, LLC; VantageScore
Solutions, LLC; and Does I through X,
Ronald J. Schutz, Esq., Randall Tietjen, Esq., Michael A. Collyard, Esq., Laura E. Nelson, Esq.,
Robins, Kaplan, Miller & Ciresi, LLP, Minneapolis, MN, on behalf of Plaintiffs.
Mark A. Jacobson, Esq., Mark H. Zitzewitz, Esq., Christopher R. Sullivan, Esq., Lindquist &
Vennum PLLP, Minneapolis, MN, and M. Elaine Johnston, Esq., Robert A. Milne, Esq.,
Christopher J. Glancy, Esq., Jack E. Pace, III, Esq., White & Case LLP, New York, NY, on
behalf of Experian Information Solutions Inc.
Lewis A. Remele, Jr., Esq., Christopher R. Morris, Esq., Bassford Remele, Minneapolis, MN,
and James K. Gardner, Esq., Ralph T. Russell, Esq., Neal, Gerber, & Eisenberg LLP, Chicago,
IL, on behalf of Trans Union, LLC.
Barbara Podlucky Berens, Esq., Justin Rae Miller, Esq., Kelly & Berens, PA, Minneapolis, MN,
on behalf of VantageScore Solutions, LLC.
This matter is before the undersigned United States District Judge for consideration of
Defendants Experian Information Solutions Inc. (Experian); Trans Union, LLC (Trans
Union); and VantageScore Solutions, LLC (VantageScore) (collectively Defendants)
Objections [Docket No. 437] to Magistrate Judge Janie S. Mayerons November 3, 2008 Order
[Docket No. 431] (November 3 Order) denying Defendants Motion to Compel [Docket No.
402]. For the reasons stated below, Defendants Objections are overruled.
The facts and procedural history relevant to this discovery dispute are set forth in Judge
Mayerons November 3, 2008 Order. Therefore, only a brief version of the relevant facts and
procedural history is presented here.
Plaintiffs Fair Isaac and myFico Consumer Services, Inc. (collectively Fair Isaac)
commenced this action in October 2006 against Defendants and Equifax, Inc. and Equifax
Information Services LLC (collectively Equifax), asserting claims for violations of antitrust
laws. Compl. [Docket No. 1] at 56-63. On June 6, 2008, Fair Isaac and Equifax entered into a
Technology Development, Distribution and License Agreement and a Data License
Agreement (collectively the Business Agreements). November 3 Order at 2. Fair Isaacs
action against Equifax was subsequently dismissed with prejudice. Id. To assist Fair Isaac in
deciding whether to settle with Equifax and enter into the Business Agreements, two Fair Isaac
employees, Lisa Nelson (Nelson) and Keri Kramers-Dove (Kramers-Dove), prepared
analyses and projections comparing what Fair Isaacs scoring business would look like
depending on whether or not the company entered into the Business Agreements. Id. at 3. In
addition, Fair Isaac prepared joint estimates with Equifax concerning the projected revenue
opportunities that the proposed Business Agreements would create. Id. at 4. When Fair Isaac
employees familiar with the analyses and projections by Nelson and Kramers-Dove were
deposed, they testified about the general nature of the analyses and projections but refused to
answer questions regarding the precise details, claiming attorney-client privilege and work
product. Id. Similarly, when Defendants served a discovery request on Fair Isaac for the
production of the analyses and projections by Nelson and Kramers-Dove, Fair Isaac refused to
disclose the requested materials on the basis of attorney-client privilege and work product. Id. at
6-7. Defendants filed a Motion to Compel, which Judge Mayeron denied, and these Objections
A. Standard of Review
The standard of review applicable to an appeal of a magistrate judges order on a
nondispositive issue is extremely deferential. Reko v. Creative Promotions, Inc., 70 F. Supp. 2d
1005, 1007 (D. Minn. 1999). The district court must affirm an order by a magistrate judge
unless it is clearly erroneous or contrary to law. Fed. R. Civ. P. 72(a). A finding is clearly
erroneous when, although there is evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a mistake has been committed.
Chakales v. Commr of Internal Revenue, 79 F.3d 726, 728 (8th Cir.1996).
B. Defendants Objections
Defendants argue that Judge Mayerons November 3 Order was clearly erroneous and
contrary to the law in the following three respects: (1) the conclusion that Defendants failed to
show a substantial need for, and an inability to obtain through other means, the analyses and
projections by Nelson and Kramers-Dove of the impact of entering into the Business Agreements
in connection with the settlement with Equifax; (2) the denial of Defendants request for the
production of business estimates prepared jointly by Fair Issac and Equifax on the ground that
the parties failed to adequately argue this issue; and (3) the denial of Defendants request to redepose
certain Fair Isaac employees concerning the analyses and projections and the joint
estimates regarding impact of the Business Agreements on Fair Isaac. Objections at 2.
1. Projections as Work-Product
Ordinary work product is not discoverable unless the party requesting such information
shows that it has substantial need for the materials to prepare its case and cannot, without undue
hardship, obtain their substantial equivalent by other means. Fed. R. Civ. P. 23(b)(3)(A)(ii); see
also In re Murphy, 560 F.2d 326, 334 (8th Cir. 1977). Judge Mayeron found that Defendants
failed to meet this burden regarding the analyses and projections by Nelson and Kramers-Dove.
November 3 Order at 18. Judge Mayeron reasoned that Defendants own experts have access to
the Business Agreements and Fair Isaacs business data, and, therefore, they are capable of
developing, without undue hardship, their own analyses and projections. Id.
Defendants contend that the analyses and projections must be based on judgments and
assumptions as to how Fair Isaac will operate in the future and how it will react to developments
in the marketplace. Objections at 8. Defendants explain that to enable their experts (who will
prepare their own analyses and projections) to challenge the credibility of the analyses and
projections by Nelson and Kramers-Dove, they must be allowed access to the analyses and
projections themselves, including the unique internal assumptions on which Nelson and
Kramers-Dove relied. Id. at 8-9. In addition, Defendants allege that Fair Isaacs CEO has
described the Business Agreements positively, while Fair Isaacs COO has said that he was
absolutely not satisfied with the Business Agreements, in spite of the fact that both sets of
statements are based upon the [analyses and projections by Nelson and Kramer-Dove]. Id. at 3-
4, 10. Defendants claim that given this inconsistency, there is a substantial need for the analyses
and projections themselves because the contradictory statements ensure that the [analyses and
projections] will be useful in impeaching the credibility of Fair Isaac witnesses. Id. at 10.
Courts have recognized that requesting work product for the purpose of using it to
impeach a witness can constitute a substantial need but that [m]ere speculation that the work
product will reveal impeachment material is not sufficient to warrant disclosure under Rule
26(b)(3). See Banks v. Wilson, 151 F.R.D. 109, 114 (D. Minn. 1993). Or as one court has
explained: [S]ubstantial need . . . can be established by showing the document is necessary for
impeachment purposes but a party must present more than speculative or conclusory
statements that the reports will contain invaluable impeachment material and the impeachment
value must be substantial because every prior statement has some impeachment value and
otherwise the exception would swallow the rule. Duck v. Warren, 160 F.R.D. 80, 83 (E.D. Va.
1995) (quotation omitted) (emphasis added); Solomon v. Scientific Am., Inc., 125 F.R.D. 34, 38
(S.D.N.Y. 1988) (same). Here, Defendants have not demonstrated that the value of any
impeaching material found in the analyses and projections by Nelson and Kramer-Dove would
be substantial. Notably, Defendants do not assert that the analyses and projections contain any
material that would be useful in impeaching Nelson and Kramer-Dove. Rather, their position is
that the analyses and projections will reveal material useful to impeaching the CEO and the
COO, who issued statements regarding the impact of the Business Agreements on Fair Isaacs
position in the credit scoring industry contrary to each other. Defendants ultimately seek to
prove that as a result of the Business Agreements between Fair Isaac and Equifax, certain of Fair
Isaacs claims will fail. The argument is that the agreements have vitiated the probability that
Fair Isaac will be driven from the credit scoring industry as a result of Defendants alleged
collusive agreements to deny Fair Isaac access to credit data and distribution. See Defs. Mem.
in Supp. of Mot. to Compel [Docket No. 404] at 22. But the simple fact that the CEO and the
COO issued contradictory statements regarding the impact of the Business Agreements is
impeaching in and of itself. Therefore, the Court is of the view that even if additional
impeaching material were found in the analyses and projections, it would not add substantial
value to Defendants impeachment argument. For all these reasons, the Court concludes that
Judge Mayeron did not clearly err in declining to compel Fair Isaac to produce the analyses and
projections by Nelson and Kramers-Dove.
2. Joint Estimates
Judge Mayeron declined to compel Fair Isaac to produce business estimates that had been
prepared jointly by Fair Isaac and Equifax regarding future revenue opportunities that might be
realized under the Business Agreements because the parties failed to adequately address the
issue. November 3 Order at 20-21. Defendants assert that they referred to the joint estimates on
three separate occasions in their brief on the Motion to Compel and that the arguments in their
brief applied not just to the analyses and projections but to the joint estimates as well.
Objections at 11-12. Thus, they claim, Judge Mayeron clearly erred in finding that the issue of
the discoverability of the joint estimates had not been adequately addressed by the parties. Id.
1 In addition, it appears that Fair Isaac no longer intends to refuse to produce the joint
estimates in light of its representation to the Court that it does not assert work-product protection
or attorney-client privilege regarding the communications between Fair Isaac and Equifax
relating to the settlement. Pls. Resp. to Defs. Objections [Docket No. 470] at 13.
Defendants reference to the joint estimates is not the same as having advanced an
argument regarding their discoverability. Defendants spent considerable effort advancing
arguments explaining why, in their view, the analyses and projections by Nelson and Kramers-
Dove did not constitute work product and were not subject to the attorney-client privilege. And
although the joint estimates were mentioned in the brief, no arguments specifically discussing the
discoverability of the joint estimates were articulated aside from a conclusory statement that the
joint estimates did not constitute work product or material protected by the attorney-client
privilege. Therefore, Judge Mayeron did not clearly err in declining to compel Fair Isaac to
produce the joint estimates.1
3. Re-Depose
In their Motion to Compel, Defendants also requested to re-depose Fair Isaacs CEO and
COO, as well as Nelson, regarding the analyses and projections by Nelson and Kramers-Dove
and the joint estimates. See November 3 Order at 7. Because Judge Mayeron declined to
compel production of the analyses and projections and the joint estimates, Judge Mayeron
likewise declined the request to re-depose the witnesses regarding those materials. Id. at 20.
Defendants challenge to this aspect of Judge Mayerons decision depends on the success of their
challenge to the discoverability of the analyses and projections and the joint estimates. See
Objections at 13-14. Because Judge Mayeron did not clearly err in declining to compel Fair
Isaac to produce those materials, the Court concludes that Judge Mayeron also did not clearly err
with respect to the request to re-depose.
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendants Objections [Docket No. 437] are OVERRULED.
s/Ann D. Montgomery
Dated: January 22, 2009.


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