Case Name: SunPower Corporation v. Martin DeBono, et al.

Case No.: 19-CV-349042

Currently before the Court is the motion by plaintiff SunPower Corporation (“SunPower”) for an order: (1) confirming that its amended trade secret designation, served October 11, 2019, satisfies Code of Civil Procedure section 2019.210 and that discovery is not stayed; (2) compelling defendant Standard Industries, Inc. (“Standard”) to provide further responses to requests for admission, set one (“RFA”), form interrogatories, set one (“FI”), special interrogatories, set one (“SI”), and requests for production of documents, set one (“RPD”), and produce documents in accordance with its further responses; and (3) compelling defendant Martin DeBono (“DeBono”) to appear for deposition and produce documents in response to document requests contained in the notice of deposition served on July 9, 2019.

Factual and Procedural Background

This action arises out of DeBono’s alleged misappropriation of SunPower’s proprietary information and trade secrets. According to the allegations of the operative first amended complaint (“FAC”), DeBono was SunPower’s Executive Vice President of Global Channels and responsible for SunPower’s rooftop solar business. (FAC, ¶ 1.) When he started at SunPower, DeBono signed a non-disclosure agreement whereby he agreed to safeguard SunPower’s confidential information and work exclusively for SunPower during his employment. (Id. at ¶ 93.) DeBono later signed an employment agreement, in which he agreed not to actively engage in any other employment without his supervisor’s prior approval. (Id. at ¶ 94.)

While he was still employed with SunPower, DeBono began covertly working for Standard. (FAC, ¶ 3.) Specifically, DeBono drafted materials and a PowerPoint presentation related to how Standard could take over the integrated rooftop solar market, forwarded proprietary and confidential emails to a private email account, and uploaded over 1,700 SunPower files to a private OneDrive account. (Id. at ¶¶ 3-6, 47-54, & 58-60.) The emails contained confidential guidance to SunPower’s sales team “on how to explain in detail to prospective and existing customers why SunPower’s solar offerings are better than the competition,” “a roadmap on different ways to differentiate and distinguish the competition, often through use of technical and product testing data,” and “confidential and proprietary information about SunPower’s sales strategy approach and execution.” (Id. at ¶¶ 4 & 48.) The files uploaded to the OneDrive account contained “confidential technical information regarding SunPower’s research and development of products and technology,” “a confidential analysis of different ways to differentiate and distinguish the competition, often through use of technical and product testing data,” and “proprietary, confidential, and trade secret information about SunPower’s sales strategy approach and execution, product development, market analysis, dealer relationships, and strategic initiatives.” (Id. at ¶¶ 6 & 58-60.)

When DeBono left SunPower on April 6, 2018, he entered into a separation agreement whereby he agreed to return all SunPower files and documents, not use any confidential and/or proprietary information for the benefit of any third party, and not solicit SunPower employees for one year. (FAC, ¶¶ 2 & 95-98.)

However, DeBono allegedly left “with over 1,700 SunPower files providing a roadmap on how to build a successful solar business.” (FAC, ¶ 2.) “These files included hundreds of SunPower confidential and proprietary documents ….” (Ibid.)

DeBono is now president of defendant GAF Energy LLC (“GAF Energy”), Standard’s new rooftop solar division. (FAC, ¶ 1.) “DeBono immediately began using SunPower’s confidential information to solicit and target other SunPower employees for hiring by Standard to build its new rooftop solar division, GAF Energy.” (Id. at ¶¶ 2, 8-9, & 64.) DeBono allegedly stole SunPower’s proprietary information and trade secrets to help Standard and GAF Energy “leapfrog past years of work needed to develop and market an integrated rooftop solar product.” (Id. at ¶¶ 1, 10-11, 44, & 65.)

Based on the foregoing allegations, SunPower filed its FAC against DeBono, Standard, and GAF Energy (collectively, “Defendants”), alleging causes of action for: (1) trade secret misappropriation; (2) breach of written contract; (3) breach of duty of loyalty; (4) aiding and abetting breach of duty of loyalty; and (5) violation of Penal Code section 502.

Discovery Dispute

In June 2019, SunPower served Defendants with a trade secret designation pursuant to Code of Civil Procedure section 2019.210. Therein, SunPower identified its trade secrets allegedly misappropriated by Defendants as:

1. The SunPower files listed on Exhibit 1 the May 30, 2019 report entitled “Martin DeBono OneDrive Data Collection” prepared by Kivu Consulting, Inc. (“Kivu”), and any information derived, modified, or copied therefrom. […]

2. The 61 internal SunPower emails authored by Cole Peyton that Mr. DeBono emailed to his personal 1ive.com email account on October 31, 2017, and any information derived, modified, or copied therefrom. […]

In early July 2019, SunPower served Standard with the RFA, FI, SI, and RPD. SunPower also served Defendants with a deposition notice for DeBono, which included several requests for production of documents.

Thereafter, counsel for the parties met and conferred regarding SunPower’s pending discovery and the sufficiency of SunPower’s trade secret designation. Specifically, Standard and GAF Energy asserted that SunPower’s trade secret disclosure was inadequate. Despite these meet and confer efforts, counsel for the parties were unable to informally resolve the discovery dispute.

In mid-July 2019, Standard and GAF Energy filed a motion to quash discovery and for an order barring further discovery until SunPower provided an adequate trade secret designation under Code of Civil Procedure section 2019.210.

In early August 2019, Standard served SunPower with objection-only responses to the RFA, FI, SI, and RPD. Standard also served Defendants with written objections to the deposition notice for DeBono. As is relevant here, Standard objected to the discovery requests and the deposition notice on the ground that SunPower had not provided a trade secret designation in compliance with Code of Civil Procedure section 2019.210.

Standard and GAF Energy’s motion proceeded to hearing on September 10, 2019. At the hearing, the court (Hon. Mark H. Pierce) adopted its uncontested tentative ruling, which denied the motion to the extent it sought to quash the RFA, FI, SI, RPD, and deposition notice for DeBono and granted the motion to the extent it sought to stay discovery with respect to the claim for trade secret misappropriation until SunPower served an adequate trade secret disclosure under Code of Civil Procedure section 2019.210. The court ordered SunPower to serve Defendants with an amended trade secret disclosure within 30 days of the date of the filing of the order on the matter.

The formal order on Standard and GAF Energy’s motion was entered on September 27, 2019.

On October 11, 2019, SunPower served Defendants with an amended trade secret designation pursuant to Code of Civil Procedure section 2019.210. (Fogarty Dec., ¶¶ 2 & 25, Ex. 1.) Therein, SunPower initially lists 14 trade secrets. (Ibid.) Underneath each of the 14 trade secrets, SunPower identifies numerous additional trade secrets. (Ibid.)

Subsequently, the parties met and conferred regarding the sufficiency of SunPower’s amended trade secret designation. Specifically, Standard and GAF Energy asserted that SunPower’s trade secret disclosure, as amended, was still inadequate. Despite these meet and confer efforts, counsel for the parties were unable to informally resolve the discovery dispute.

Consequently, on January 3, 2020, SunPower filed the instant motion. Standard and GAF Energy filed papers in opposition to the motion on January 14, 2020. On January 21, 2020, SunPower filed a reply.

Discussion

Pursuant to Code of Civil Procedure sections 2030.300, 2031.310, 2031.320, and 2033.290, Sun Power moves for an order: (1) confirming that its amended trade secret designation satisfies Code of Civil Procedure section 2019.210 and that discovery is not stayed; (2) compelling Standard to provide further responses to the RFA, FI, SI, and RPD, and produce documents in accordance with its further responses; and (3) compelling DeBono to appear for deposition and produce documents in response to document requests contained in his notice of deposition.

I. Request for Order Confirming Amended Trade Secret Designation Satisfies Code of Civil Procedure Section 2019.210 and Discovery is Not Stayed

As a preliminary matter, SunPower initially asks the Court to issue an order confirming that its amended trade secret designation satisfies Code of Civil Procedure section 2019.210 and that discovery is not stayed.

“A basic principle of motion practice is that the moving party must specify for the court and the opposing party the grounds upon which that party seeks relief.” (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1125 (Luri); see Cal. Rules of Ct., rule 3.1110(a) [motion must state nature of order being sought and ground for issuance of such order]; see also Code Civ. Proc., § 1010 [grounds upon which motion are made must be stated in notice].)

SunPower cites Code of Civil Procedure sections 2030.300, 2031.310, 2031.320, and 2033.290 as the legal bases for its motion. But these provisions do not authorize the Court to make the judicial declaration sought by SunPower. Code of Civil Procedure sections 2030.300, 2031.310, and 2033.290 authorize motions to compel further responses to requests for admission, interrogatories, and requests for production of documents. (Code Civ. Proc., §§ 2030.300, subd. (a), 2031.310, subd. (a), & 2033.290, subd. (a).) Code of Civil Procedure section 2031.320 authorizes motions to compel compliance with an agreement to produce documents. (Code Civ. Proc., § 2031.320, subd. (a).) Thus, SunPower has not provided a legal basis, and the Court is aware of none, for an order confirming that SunPower’s amended trade secret designation satisfies Code of Civil Procedure Section 2019.210 and that discovery is not stayed.

Accordingly, the motion is DENIED to the extent it seeks a declaration that SunPower’s amended trade secret designation satisfies Code of Civil Procedure section 2019.210 and that discovery is not stayed.

II. Request for Order Compelling Standard to Provide Further Responses to the RFA, FI, SI, and RPD

Next, SunPower moves to compel Standard to provide further responses to the RFA, FI, SI, and RPD, without objections, and produce documents in accordance with its further responses.

A. Legal Standard

If a party demanding a response to a request for admission deems an objection to a particular request is without merit or too general, that party may move for an order compelling a further response. (Code Civ. Proc., § 2033.290, subd. (a).) If a timely motion to compel a further response to a request for admission has been filed, the burden is on the responding party to justify any objections or failure to fully answer. (Fairmont Ins. Co. v. Super. Ct. (2000) 22 Cal.4th 245, 255 (Fairmont).)

If a party demanding a response to an interrogatory deems that an objection to an interrogatory is without merit or too general, that party may move for an order compelling a further response. (Code Civ. Proc., § 2030.300, subd. (a)(1)–(3).) If a timely motion to compel a further response to an interrogatory has been filed, the burden is on the responding party to justify any objection to the discovery request. (Fairmont, supra, 22 Cal.4th at p. 255; Coy v. Super. Ct. (Wolcher) (1962) 58 Cal.2d 210, 220-221.)

If a party demanding a response to a request for production of documents deems that an objection in the response is without merit or too general, that party may move for an order compelling a further response. (See Code Civ. Proc., § 2031.310, subd. (a).) On a motion to compel a further response to a request for production of documents, it is the moving party’s burden to demonstrate good cause for the discovery sought. (Kirkland v. Super. Ct. (2002) 95 Cal.App.4th 92, 98 (Kirkland).) Once good cause has been shown, the burden shifts to the responding party to justify any objections. (Ibid.)

B. Analysis

1. Good Cause

As an initial matter, SunPower must first establish good cause for the discovery sought by the RPD.

To establish “good cause,” SunPower must show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Super. Ct. (1997) 53 Cal.4th 1113, 1117.)

While SunPower makes little effort to demonstrate the existence of good cause for the requests at issue, the Court finds it is self-evident that there is generally good cause for the discovery sought by the RPD. For example, the RPD ask Standard to produce: all SunPower property in its possession; documents containing SunPower proprietary or confidential information; documents identified in SunPower’s trade secret disclosure; documents related to any search for SunPower documents on Standard’s network and computers; and documents related to Standard and GAF Energy’s hiring of DeBono. The discovery sought by the requests will likely elicit evidence tending to prove or disprove Plaintiff’s claims for trade secret misappropriation, breach of contract, and breach of duty of loyalty because the documents requested directly relate to matters alleged in the complaint or raised during the course of discovery. Documents regarding such matters are necessary for SunPower to evaluate the merits of its claims and to prepare the case for trial. Thus, there is generally good cause for the discovery sought by the RPD.

2. Objections

The vast majority of the parties’ papers and arguments address the merits of Standard’s objection to the RFA, FI, SI, and RPD on the ground that SunPower’s amended trade secret disclosure does not comply with Code of Civil Procedure section 2019.210.

“In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act …, before commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code.” (Code Civ. Proc., § 2019.210.) A plaintiff alleging misappropriation of a trade secret “should describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within which the secret lies.” (Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 253.)

“[S]ection 2019.210 serves four interrelated goals: ‘ “First, it promotes well-investigated claims and dissuades the filing of meritless trade secret complaints. Second, it prevents plaintiffs from using the discovery process as a means to obtain the defendant’s trade secrets. [Citations.] Third, the rule assists the court in framing the appropriate scope of discovery and in determining whether plaintiff’s discovery requests fall within that scope. [Citations.] Fourth, it enables defendants to form complete and well-reasoned defenses, ensuring that they need not wait until the eve of trial to effectively defend against charges of trade secret misappropriation. [Citation.]”’ [Citation.]” (Brescia v. Angelin (2009) 172 Cal.App.4th 133, 144.)

“Reasonable particularity” mandated by section 2019.210 does not mean that the party alleging misappropriation has to define every minute detail of its claimed trade secret at the outset of the litigation. Nor does it require a discovery referee or trial court to conduct a miniature trial on the merits of a misappropriation claim before discovery may commence. Rather, it means that the plaintiff must make some showing that is reasonable, i.e., fair, proper, just and rational [citation], under all of the circumstances to identify its alleged trade secret in a manner that will allow the trial court to control the scope of subsequent discovery, protect all parties’ proprietary information, and allow them a fair opportunity to prepare and present their best case or defense at a trial on the merits. [Citations.]

(Advanced Modular Sputtering, Inc. v. Super. Ct. (2005) 132 Cal.App.4th 826, 835.)

“ ‘Trade secret’ means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: [¶] (1) 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 [¶] (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Civ. Code, § 3426.1, subd. (d).)

Here, some of the trade secrets listed in SunPower’s amended trade secret designation are identified with reasonable particularity.

For example, Item Nos. 2-4, 7, 8, and 10 in the amended trade secret disclosure clearly identify specific reports, by name, and state that each report, in its entirety, is a claimed trade secret compilation. Item Nos. 2-4, 7, 8, and 10 also identify specific slides, by number, within those reports and state that each slide, itself, is a trade secret compilation. Item Nos. 2-4, 7, 8, and 10 do not state that particular information within the reports and/or the slides is trade secret information. Rather, those items merely identify the reports and certain slides as trade secret compilations. Thus, the trade secret compilations listed in Item Nos. 2-4, 7, 8, and 10 are identified with reasonable particularity because the reports are identified by name and the slides are identified by number and location within a particular report. Such information permits Defendants and the Court to ascertain the boundaries within which the alleged trade secret lies.

Additionally, Item No. 14 states that “[t]he compilation of emails authored by … Cole Peyron[ ] that DeBono emailed to his personal live.com email account on October 31, 2017, and took with him when he left SunPower, is SunPower’s trade secret.” This description of the emails is sufficiently detailed such that Defendants and the Court can ascertain the specific emails that comprise the claimed trade secret compilation. Consequently, the trade secret compilation listed in Item No. 14 is identified with reasonable particularity.

However, several of the trade secrets listed in SunPower’s amended trade secret designation are not identified with reasonable particularity.

For example, Item No. 5 in the amended trade secret disclosure identifies two documents, by name, which are an original and a copy of a report, and states that the report is a trade secret compilation. Item No. 5 also provides that “SunPower identifies the following trade secret compilations contained in the [report].” Item No. 5 then states various categories of information—such as SunPower’s costs in fiscal year 2017 for direct and indirect sales—can be found on certain pages in the report. It is unclear from this description whether the trade secret compilations within the report are the individual pages themselves, the combination of pages taken together, or some particular combination of information contained within the pages. Without further information, Defendants and the Court cannot ascertain the boundaries within which the alleged trade secret lies.

Item No. 6 in the amended trade secret designation is similarly defective. Although Item No. 6 identifies a particular document, by name, as a trade secret compilation, it also purports to identify trade secret compilations within the document by describing various categories of information—such as costs and returns—that can be found on certain slides in the document. It is unclear from this description whether the trade secret compilations within the document are the individual slides themselves, the combination of slides taken together, or some particular combination of information contained within the slides. Further adding to this confusion, buried in the description of the contents of the slides, is the statement that certain information contained within some of the slides is trade secret information. Without additional information, Defendants and the Court cannot ascertain the boundaries within which the alleged trade secret lies.

Lastly, Item No. 12 is another example of trade secrets that are not identified with particularity. Item No. 12 states that SunPower’s findings and results from a review of a competitor’s intellectual property are SunPower’s trade secrets. But there is no description of what SunPower’s findings and results were or where they can be found. Without this additional information, Defendants and the Court cannot ascertain the boundaries within which the alleged trade secret lies.

For these reasons, Standard’s objection to the discovery requests on the ground that SunPower’s amended trade secret disclosure does not comply with Code of Civil Procedure section 2019.210 is sustained. Because this objection is well-taken, further responses to the RFA, FI, SI, and RPD are not warranted at this time.

C. Conclusion

Accordingly, the motion is DENIED, without prejudice, to the extent it seeks to compel Standard to provide further responses to the RFA, FI, SI, and RPD.

III. Request for Order Compelling DeBono to Appear for Deposition and Produce Documents at Deposition

SunPower moves to compel DeBono to appear for his deposition and produce documents in response to document requests contained in his deposition notice.

A. Legal Standard

As a threshold matter, the Court addresses the legal standard applicable to this portion of SunPower’s motion.

“A basic principle of motion practice is that the moving party must specify for the court and the opposing party the grounds upon which that party seeks relief.” (Luri, supra, 107 Cal.App.4th at p. 1125.) “It is elemental that a notice of motion must state in writing the ‘grounds upon which it will be made.’ ” (Gonzales v. Super. Ct. (1987) 189 Cal.App.3d 1542, 1545; see Cal. Rules of Ct., rule 3.1112(d)(3).) However, “[a]n omission in the notice may be overlooked if the supporting papers make clear the grounds for the relief sought.” (Luri, supra, 107 Cal.App.4th at p. 1125; Carrasco v. Craft (1985) 164 Cal.App.3d 796, 808.)

Here, SunPower does not identify any statute authorizing its motion to the extent it seeks to compel Debono to attend his deposition and produce documents requested in his deposition notice. Rather, SunPower cites Code of Civil Procedure sections 2030.300, 2031.310, 2031.320, and 2033.290, which authorize motions to compel further responses to requests for admission, interrogatories, and requests for production of documents and motions to compel compliance with an agreement to produce documents. (Code Civ. Proc., §§ 2030.300, subd. (a), 2031.310, subd. (a), 2031.320, subd. (a), & 2033.290, subd. (a).)

That being said, it is readily apparent given that this portion of SunPower’s motion may properly be brought under Code of Civil Procedure section 2025.450. That statute provides that if, after service of a deposition notice, “a party to the action or an … employee of a party,” without having served a valid objection to the deposition notice, fails to appear for deposition, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice. (Code Civ. Proc., § 2025.450, subd. (a).)

A valid objection is one based on an error or irregularity in the deposition notice (i.e., the notice does not comply with Code of Civil Procedure sections 2025.210 through 2025.290). (Code Civ. Proc., § 2025.410, subd. (a).) If a party objects on other grounds, the party must nevertheless appear for the deposition as noticed, unless the party files a motion to stay the taking of the deposition and quashing the notice or for a protective order. (See Code Civ. Proc., §§ 2025.280, subd. (a), 2025.410, subd. (c), & 2025.420.)

Notably, the Civil Discovery Act does not contemplate service of formal written objections to document production requests made in connection with a deposition notice. Instead, a deponent may substantively object to production at the deposition itself. (See Carter v. Super. Ct. (1990) 218 Cal.App.3d 994, 997 (Carter) [noting that procedure relating to stand-alone document demands “is quite different from a deposition at which a party is required to bring documents”]; see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017), ¶ 8:531.)

A party moving to compel the deponent’s attendance and testimony must show that: (1) he or she served the responding party with the deposition notice; (2) no valid objection was asserted; and (3) the party failed to appear. (See Code Civ. Proc., § 2025.450, subd. (a); Leko v. Cornerstone Bldg. Inspection Service (2001) 86 Cal.App.4th 1109, 1124 (Leko).) Additionally, “[t]he motion shall be accompanied by a meet and confer declaration under Section 2016.040, or, when the deponent fails to attend the deposition and produce documents. . . by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.” (Code Civ. Proc., § 2025.450, subd. (b)(2).) “Implicit in the requirement that counsel contact the deponent to inquire about the nonappearance is a requirement that counsel listen to the reasons offered and make a good faith attempt to resolve the issue.” (Leko, supra, 86 Cal.App.4th at p. 1124.)

A party moving to compel the production of documents must also “set forth specific facts showing good cause justifying the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.” (Code Civ. Proc., §2025.450, subd. (b)(1); see also Kirkland v. Super. Ct. (2002) 95 Cal.App.4th 92, 98 (Kirkland).) Once good cause is shown, the burden shifts to the responding party to justify its objections. (See Kirkland, supra, 95 Cal.App.4th at p. 98.)

B. Analysis

To the extent SunPower seeks to compel DeBono to attend and produce documents at his deposition, the motion is not well-taken.

Standard and GAF Energy previously moved for and were granted a stay of discovery in this action with respect to the claim for trade secret misappropriation until SunPower served an adequate trade secret disclosure under Code of Civil Procedure section 2019.210. For the reasons explained above, SunPower’s amended trade secret designation is deficient. As SunPower has not yet served Defendants with a trade secret disclosure in compliance with Code of Civil Procedure section 2019.210, discovery remains stayed with respect to the claim for trade secret misappropriation. Consequently, DeBono is not required to appear for his deposition or produce documents requested in his deposition notice.

The Court also notes that even if an adequate trade secret designation had been provided, SunPower’s attempt to compel DeBono to produce documents at his deposition would be premature. The service of a deposition notice is effective to require the deponent to appear and testify at a deposition at the location, date, and time specified in the notice. (Code Civ. Proc, § 2025.280, subd. (a).) The statute contemplates that a deponent asked to bring documents to the deposition for inspection may object to the production of such documents at the deposition itself. (Carter, supra, 218 Cal.App.3d at p. 997 [noting that procedure relating to ordinary inspection demands “is quite different from a deposition at which a party is required to bring documents”].) Only once the party appears for the deposition and either objects to the document requests or simply fails to produce them may the requesting party then file a motion to compel production. (See ibid.)

C. Conclusion

Accordingly, the motion is DENIED, without prejudice, to the extent it seeks to compel DeBono to appear at deposition and produce documents requested in his deposition notice.