Merits Incentives, LLC v. The Eighth Judicial District Court of the State of Nevada

Merits Incentives, LLC, and its business partners (plaintiffs) had contracted with Bumble & Bumble, LLC, to distribute Bumble’s salon products. Bumble sued the petitioners for breach of contract. Prior to Bumble’s suit, one of the petitioners had fired an employee. The company later sued the employee, alleging that he had stolen confidential and proprietary information, and the employee was permanently enjoined from distributing any of the stolen information. After filing suit, Bumble’s attorney, John Mowbray, received an anonymous package addressed to Bumble’s counsel that contained a disk of electronic files. These files contained information about the petitioners that was relevant to Bumble’s suit. Mowbray served the petitioners with multiple supplemental pretrial discovery disclosures that included a copy of the disk and identified that an anonymous source had provided it. Mowbray then served the petitioners with a request for discovery that listed the documents and asked for authentication. The petitioners did not object or claim that the information was privileged for eight months. At that point, the petitioners filed a motion to dismiss Bumble’s case with prejudice. Alternatively, the motion sought to prohibit Bumble’s use of the documents contained in the disk and to disqualify Mowbray on the grounds that the information on the disk was misappropriated and privileged. The Eighth Judicial District Court of the State of Nevada (defendant) found that the disk was sent by an unsolicited, anonymous source, held that Mowbray had fulfilled his ethical duties by repeatedly notifying the petitioners of its delivery and contents, and denied the motion for his disqualification.