2016-00202624-CU-SL

MyECheck, Inc. vs. Kenneth Maciora

Nature of Proceeding: Motion for Protective Order

Filed By: ElGuindy, Joseph M.

Plaintiff MyECheck, Inc.’s (“MEC”) motion for protective order relative to the documents sought by defendant in pro per Maciora’s Requests for Production, Set Four, is ruled on as follows.

The notice of motion does not comply with Code of Civil Procedure §1010 or CRC Rule 3.1110(a).

Defendant Maciora failed to comply with CRC Rule 3.1110(b)(3).

Overview

This case presents a multi-party business dispute. In the Third Amended Complaint (“3AC”), plaintiff MEC alleges its former CEO, defendant Zalunardo, falsified an employment agreement purportedly entitling him to MEC shares and that he purported to transfer these shares to defendant Maciora in 2015 and 2016, paying de minimis consideration because he knew the shares were fake. MEC further alleges Maciora and others maintain that a draft proposal to issue MEC shares to certain employees, which was never ratified, legitimizes the transfers to Maciora. It is further alleged that Maciora wrongfully obtained and disseminated MEC’s confidential information in violation of a non-disclosure agreement and in an attempt to extort money and stock from MEC and its officers. According to MEC, Maciora has also harassed MEC’s shareholders, employees, auditors, business partners and investors to disrupt operations and to extort money but ultimately causing MEC shares to lose significant value and disrupting important business relationships.

The 3AC contains a number of causes of action against Maciora and others for securities fraud in violation of Corporations Code §25400(D), breach of contract, intentional interference with prospective economic advantage/contractual relations, and violation of B&P Code §17200 et seq.

In January 2018, defendant Maciora propounded Requests for Production, Set Four, on plaintiff MEC, requesting production of copies of MEC’s “valid and effective” contracts with three non-parties (i.e., United Bank of Africa, Tangiers Capital and Chicago Ventures). The contracts with these three entities are specifically alleged to be the basis for MEC’s causes of action for intentional interference with prospective economic advantage and with contractual relations.

Moving Papers. MEC now moves for a protective order relieving it of the obligation to produce these contracts to defendant Maciora on the ground these contracts contain private, sensitive information which Maciora is likely to use to further his assaults on MEC, its stock, its shareholders and the prospective purchasers of MEC stock, causing still more irreparable harm. MEC points out that a protective order purporting to limit Maciora’s prospective use and disclosure of the contracts and information therein is likely to be ineffective given the existing allegations against Maciora and his history of refusing to comply with court orders. Likewise, an “Attorney Eyes Only” designation on the contracts is not feasible since Maciora is acting in pro per and is otherwise not bound by the same rules governing the conduct of attorneys. Finally, MEC maintains that any relevant information from these contracts can easily be obtained through other less intrusive means which fairly balance the competing interests of both MEC and Maciora.

Opposition. Defendant Maciora opposes, making a variety of arguments against the proposed protective order. First, he contends there is no basis to exempt MEC from discovery pursuant to Code of Civil Procedure §2017.020 or §2031.060, especially since MEC did not “promptly” move for a protective order. Second, the opposition

insists MEC waived its right to assert a trade secret privilege since no objection on this ground was timely asserted in response to the Requests for Production, Set Four and since MEC has failed to describe the trade secret at issue here. Next, Maciora argues MEC has not demonstrated the requisite “good cause” for a protective order and did not meet-and-confer in good faith prior to filing this motion. The opposition concludes with a request for sanctions against MEC (even though Maciora is acting in pro per and did not incur any attorney fees in connection with the present motion).

Analysis

While plaintiff MEC has timely pursued this protective order and has also demonstrated sufficient “good cause” to justify some limitation on defendant Maciora’s request for production of the three contracts at issue, this court finds that the proposed protective order excusing MEC from producing at all the three contracts is unjustifiably overbroad under the circumstances particularly since MEC has in its 3AC explicitly alleged that defendant Maciora interfered with these very contracts.

Rather than altogether relieving plaintiff MEC from the obligation to produce these contracts, the court will instead permit MEC to redact from each of these contracts that information which is either sensitive or trade secret and the disclosure of which would unduly or irreparably harm MEC, its stock or its reputation before producing the contracts to defendant Maciora.