2012-00131661-CU-BC

R&T Investments, Inc. vs. Kawasaki Motors Corp USA

Nature of Proceeding: Motion to Compel Compliance with Subpoena

Filed By: Sieving, Michael M.

Plaintiff’s RT Investments Inc, dba Carmichael Honda Motorsports, Rancourt Family
Trust, Dana Tutt and Jody Tutt’s Motion to Compel Kawasaki Motors Finance
Corporation’s Compliance with business records subpoena is denied.

The motion is opposed by Granite Bay Motorcycle Partners (“GBMP”), Sean Coplen,
and Kawasaki Motor Finance Company.

Plaintifffs contend that defendants made representations that Plaintiffs would be
awarded the Kawasaki franchise for the Roseville, California market. Kawasaki
awarded the franchise to GBMP.

Plaintiff Carmichael Honda Motorsports is a competitor of GBMP. GPMB has been in
business for over ten years and plaintiff recently located its store two miles from
GPMP. Plaintiffs served a deposition subpoena for production of business records on
Kawasaki Motor Finance Corp (“KM Finance”) seeking documents provided to them by
GBMP in conjunction with its application to become an authorized reseller. The
records sought are defined in the motion as GBMP’s application, evaluation, and
eventual acceptance as a Kawasaki franchisee. (See Subpoena, categories 1-12)
GBMP objected to the subpoena on the grounds of trade secret and privacy and this
motion followed.

Civil Code Section 3426.1(d) provides as follows: (d) ‘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. CCP 3426.1(d).

Plaintiffs contend that the vast majority, if not all, of the documents sought via the
Subpoena do not contain information falling under the definition of a “trade secret”, and
therefore should not be protected by any trade secret privilege. Plaintiffs however
have failed to include in their points and authorities any discussion of the specific 12
categories of documents sought by the subpoena.

The confidential financial affairs of non-parties are entitled to privacy protection.
Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 658. The need for the
discovery must outweigh the privacy interests that would be infringed by the discovery.
Binder v. Superior Court ( 1987) 196 Cal. App. 3d 893, 900. Relevance alone is
insufficient. Third party records are protected from discovery “unless the litigant can
show a compelling need for the particular documents and that the information cannot
reasonably be obtained through depositions or from nonconfidential sources. Harding
Lawson Associates v. Superior Court (1992) 10 Cal. App. 4th 7, 10. Corporations are
entitled to some privacy protection [see, e.g. Roberts v. Gulf Oil Corp. (1983) 147 Cal.
App. 3d 770, 791], and thus the courts must determine whether such privacy interests
are outweighed by the relevance of the information sought to the subject matter of the
pending litigation. Hecht, Solberg, Robinson, Goldberg, & Bagley v. Sup. Ct. (2006)
137 Cal.App.4th 579, 595. The right to privacy is not absolute. See, e.g. Hill v. National
Collegiate Athletic Ass’n. (1994) 7 Cal. 4th 1, 39-40.

The Declaration of Scott Coplen states that he has been in business at the GBMP
location for over ten years and that plaintiffs recently located a store two miles from
GBMP. Mr. Coplen negotiated the franchise with Kawasaki. He states that he was
required to provide to Kawasaki GBMP’s business plans, sales figures, projected sales
by category, customer lists, personal financial information of GBMP’s principals, and
service and parts historical records. (Declaration of Sean Coplen)

Of relevance here, a party seeking to discover the confidential personal information of
non-parties must show such information is “directly relevant and essential to the fair
resolution of the lawsuit.” Britt v. Superior Court (1978) 20 cal.3d 844, 860. Discovery
should not be ordered unless the party seeking the discovery can show the information
sought is not available by other sources or through less intrusive means. Allen v. Sup.
Ct. (1984) 151 Cal.App.3d 447,449. Plaintiff has made no effort to show that each of
the twelve categories of documents seeking confidential information from their direct
competitor is directly relevant to plaintiff’s claims against Kawasaki, nor have they
shown that they cannot obtain the information about Kawasaki’s decision not to award them the franchise by less intrusive means such as from Kawasaki’s own records or
witnesses.

The Court has balanced the third party’s interest in the confidentiality of its customer
lists, business plans, and other information described in the Declaration of Sean
Coplen and finds that the third parties’ privacy/trade secret interests outweigh plaintiffs’
need for the information, particularly since plaintiffs’ have not made any argument in
their moving papers as to why the specific categories of information are directly
relevant to their claims against Kawasaki.

The notice of motion does not provide notice of the Court’s tentative ruling system, as
required by Local Rule 1.06(D). Counsel for moving party is directed to contact
counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the
Court’s tentative ruling procedure. If counsel for moving party is unable to contact
counsel for opposing party prior to hearing, counsel for moving party shall be available
at the hearing, in person or by telephone, in the event opposing party appears without
following the procedures set forth in Local Rule 1.06(B).

The prevailing party shall prepare a formal order for the Court’s signature pursuant to
C.R.C. 3.1312.