Bayside Solutions, Inc. v. Avila

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 BAYSIDE SOLUTIONS, INC., Case No. 21-cv-08738-PJH 8 Plaintiff, 9 v. DISCOVERY ORDER 10 ANTONIO AVILA, et al., Re: Dkt. No. 50 11 Defendants. [13] 14 Before the court is a joint discovery letter brief summarizing some existing 15 discovery disputes between the parties. Having read the parties’ submission and 16 carefully considered their arguments and the relevant legal authority, and good cause 17 appearing, the court hereby rules as follows. 18 BACKGROUND 19 This is a trade secret dispute in which plaintiff Bayside Solutions, Inc., alleges that 20 its former employee, Antonio Avila, stole Bayside’s valuable trade secret information from 21 Bayside to the benefit of RecruitGigs, the company of Antonio’s brother, Armando Avila. 22 Because the litigants are direct competitors, the parties have resisted unnecessary 23 or broad disclosure of valuable client information. The court addressed this circumstance 24 earlier in the case, when defendants objected to use of the “HIGHLY CONFIDENTIAL – 25 ATTORNEYS’ EYES ONLY” (“AEO”) designation under the court’s standard protective 26 order. See Dkt. 40. The court entered the district’s standard protective order in this 27 case, setting forth boundaries for disclosure and maintenance of non-public materials as 1 materials. Dkt. 43. 2 In the instant discovery letter brief, plaintiff complains of defendant’s failure to 3 provide timely or complete responses to requests for production and interrogatories. 4 Defendant responds that plaintiff’s discovery requests are overbroad, disproportionate to 5 the needs of the case, and designed to obtain defendant’s own trade secret information, 6 which is irrelevant to plaintiff’s claims. Both parties accuse the other of unnecessary 7 delay in propounding or responding to discovery requests. 8 DISCUSSION 9 A. Legal Standard 10 Federal Rule of Civil Procedure 26(b)(1) provides a broad definition of relevance 11 for purposes of discovery: “Parties may obtain discovery regarding any nonprivileged 12 matter that is relevant to any party’s claim or defense and proportional to the needs of the 13 case.” “[D]iscovery is not limited to issues raised by the pleadings, for discovery itself is 14 designed to help define and clarify the issues.” Oppenheimer Fund, Inc. v. Sanders, 437 15 U.S. 340, 351 (1978). “Nor is discovery limited to the merits of a case, for a variety of 16 fact-oriented issues may arise during litigation that are not related to the merits.” Id. The 17 party resisting discovery “has the burden to show that discovery should not be allowed, 18 and has the burden of clarifying, explaining, and supporting its objections.” Oakes v. 19 Halvorsen Marine Ltd., 179 F.R.D. 281, 283 (C.D. Cal. 1998). 20 B. Analysis 21 Here, the court finds that both sides deserve some blame for the current 22 stalemate. Defendants have improperly withheld discovery responses when the 23 protective order provides the necessary protections for the responses and documents 24 they deem sensitive. And plaintiff has overreached, demanding discovery 25 disproportionate to the demands of the dispute. 26 The scope of discovery is necessarily broad. Plaintiff is entitled to discovery of 27 non-privileged materials. This includes information regarding defendant’s business 1 responses based on trade secret confidentiality is not well taken in light of the protective 2 order. The protective order is in place for exactly this purpose: to facilitate the exchange 3 of discovery without public disclosure and even to limit access to the materials by the 4 litigants themselves. If production or responses to plaintiff’s requests implicate 5 confidential, non-privileged material, there exists a straightforward procedure for 6 designating such material as confidential or “HIGHLY CONFIDENTIAL – ATTORNEYS’ 7 EYES ONLY.” Dkt. 40. The burden then shifts to the other side to challenge the 8 designation to make it public. Defendant’s reluctance to produce responsive material is 9 thus unsupportable. 10 On the other hand, plaintiff’s discovery demands appear disproportionate to the 11 needs of the case. Defendant describes some of the discovery demands as follows: 12 request for production number 30 seeks “All DOCUMENTS RELATING TO all YOUR 13 customers and potential customers,” request for production number 34 seeks 14 “DOCUMENTS sufficient to show all YOUR customers and potential customers, and 15 YOUR revenue, profits, and costs or estimated revenue, profits, and costs, for each,” and 16 special interrogatory number 9 asks for “Identify and describe, in detail, any and all 17 estimates or projections RELATING TO YOUR profits, revenues, and costs for the next 18 10 years.” Dkt. 50 at 5. Plaintiff is not entitled to the entirety of defendant’s business 19 records and its projections of future business, including revenues and costs. 20 Accordingly, plaintiff must re-issue its discovery requests and temporally limit them 21 to the relevant period of Antonio Avila’s employment with Bayside to present. Plaintiff 22 must also limit its discovery requests to seek information regarding customers on its own 23 previous and current customer lists. Both sides’ client information may be designated 24 confidential or AEO pursuant to the protective order to facilitate the exchange. 25 Defendants must respond within 28 days of receipt of the discovery requests, providing 26 either (1) complete responses to specific requests, (2) deadlines by which plaintiff should 27 expect to receive the complete responses to specific requests, or (3) partial responses 1 incomplete. Upon completion of discovery related to customers on plaintiff’s own 2 customer lists, plaintiff may then pursue additional discovery following review of the first 3 round of discovery obtained. 4 IT IS SO ORDERED. 5 Dated: January 31, 2023 6 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 7 United States District Judge