Jack, et al. v. Milpitas Cab, LLC, et al. CASE NO. 113CV243672
DATE: 19 June 2014 TIME: 9:00 LINE NUMBER: 14
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Wednesday 18 June 2014. Please specify the issue to be contested when calling the Court and counsel.

On 19 June 2014, the motion of third party SuperShuttle of San Francisco, Inc. (“SuperShuttle”) to quash a business records subpoena, for a protective order, and for monetary sanctions was argued and submitted. Plaintiffs Orville Jack and Caryl Farrer (collectively “Plaintiffs”), through their guardian ad litem Jesse Jack, filed a formal opposition to the motion.

All parties are reminded that all papers must comply with California Rules of Court, rule 3.1110(f).

Statement of Facts

This personal injury action arises out of an automobile accident that occurred on Interstate 880 in December 2012. According to the allegations of the complaint, on 28 December 2012, at approximately 1:10 a.m., Plaintiffs were traveling in a cab owned and operated by defendant Milpitas Cab Company from the San Jose Airport to their home. While traveling northbound on Interstate 880 near the Calaveras Boulevard exit, the driver of the cab either unreasonably slowed the vehicle or came to a complete stop on the freeway, which caused defendant Abdul Arya (“Arya”), who was also traveling on the freeway, to crash into the cab carrying Plaintiffs. As a result of the accident, Plaintiffs sustained severe injuries, including the eventual death of Caryl Farrer.

At the time of the accident, Arya worked as a shuttle driver for SuperShuttle but, when the accident occurred, he was driving his personal vehicle home from work.

Based upon these allegations, on 27 March 2013, Plaintiffs filed an action against Milpitas Cab Company, the driver of the cab, Arya, SuperShuttle, and Does 1 through 50. Plaintiffs alleged that the negligence of both drivers caused the accident and that Milpitas Cab Company and SuperShuttle should be held liable on the theory of respondeat superior.

On 14 May 2013, based upon the fact that Arya was driving his own personal vehicle at the time of the accident and representations by SuperShuttle that Arya was not acting within the scope of his employment when the accident occurred, Plaintiffs voluntarily dismissed SuperShuttle from the action.

Discovery Dispute

Plaintiffs took the deposition of Arya on 30 January 2014. At the deposition, Arya testified that, at the time he was driving a van for SuperShuttle, he worked for two people referred to as “Steve” and “Benny,” which Plaintiffs now believe are or were franchisees of SuperShuttle. More specifically, Arya testified that he would receive a message the night before a shift indicating what time his shift was to begin the following day and whether he was to drive to either Steve or Benny’s house to pick up the SuperShuttle van. On the day of the accident, Arya picked up the shuttle from Benny’s house at around 5:00 a.m. and returned the van at Benny’s house at the end of his shift at around 11:00 p.m.

On 21 February 2014, after unsuccessfully attempting to locate Steve and Benny, Plaintiffs served SuperShuttle with a deposition subpoena seeking to depose a company representative regarding the company’s interactions, dealings, and relationship with Arya and SuperShuttle franchisees Steve and Benny.

SuperShuttle refused to produce a company representative for a deposition, but agreed to make its risk manager, Beth Edinger, available for a telephonic interview. The interview with Ms. Edinger took place on 11 April 2014, and lasted approximately 40 minutes. During the interview, Ms. Edinger confirmed that SuperShuttle is in fact a franchise and provided other information concerning SuperShuttle’s business structure. At some point during the interview, Plaintiffs’ counsel asked Ms. Edinger for the contact information of Steve and Benny. According to Plaintiffs’ counsel, counsel for SuperShuttle “immediately interrupted and instructed her not to answer the question.” (Pl.s’ Opp., p. 3.)

On 22 April 2014, Plaintiffs served SuperShuttle with a business records subpoena, seeking the following three documents: (1) the franchise agreement between SuperShuttle and Steve and Benny; (2) the franchise agreement between SuperShuttle and company formed by Steve and Benny; and (3) the insurance policy that Steve and Benny were required to buy from SuperShuttle to operate at the San Francisco International Airport.

On 8 May 2014, counsel for SuperShuttle sent a meet and confer letter to Plaintiffs’ counsel, asking that the business records subpoena be withdrawn on the grounds that it requests irrelevant information “from an entity that has nothing to do with the allegations in plaintiff’s complaint.” (Decl. of Mark Hagopian in Support of Mot. to Quash, ¶ 9.)

Plaintiffs’ counsel responded on 9 May 2014, asserting that the documents requested are relevant and that Plaintiffs are “entitled to discovery regarding the relationship between one of the Defendants in our case [Arya], and his employer, SuperShuttle.” (Id., ¶ 10.)

On 15 May 2014, having reached an impasse as to the relevance of the documents, SuperShuttle filed the motion presently before the Court, asking the Court to quash the subpoena and to enter a protective order.

Plaintiffs filed their opposition to SuperShuttle’s motion on 6 June 2014, and SuperShuttle filed a reply on 12 June 2014.

Discussion

SuperShuttle seeks two forms of relief. First, it asks the Court to quash Plaintiffs’ business records subpoena. Second, it seeks a protective order prohibiting Plaintiffs from serving another subpoena on SuperShuttle. SuperShuttle seeks both forms of relief on the grounds that the information in the documents sought by the subpoena is irrelevant to Plaintiffs’ claims and the franchise agreements contain proprietary trade secret information.

A. Separate Statement

As an initial matter, Plaintiffs assert that SuperShuttle’s motion is procedurally defective because is it not accompanied by a separate statement. Based upon this procedural defect, Plaintiffs argue that the motion should be denied.

California Rules of Court, rule 3.1345 provides that “motions that require a separate statement include a motion . . . [t]o compel or to quash the production of documents or tangible things at a deposition.” (Cal. Rules of Court, rule 3.1345(a)(5).) According to rule 3.1345, “[a] separate statement is a separate document filed and served with the discovery motion that provides all the information necessary to understand each discovery request and all the responses to it that are at issue.” (Cal. Rules of Court, rule 3.1345(c).)

Where the moving party has failed to supply the court with a separate statement, or has provided the court with a deficient separate statement, the court has discretion, but is not required, to deny the discovery motion. (See Mills v. U.S. Bank (2008) 166 Cal.App.4th 871, 893 [holding that “trial court was well within its discretion to deny the motion to compel discovery” on the ground that the moving party provided a non-code-compliant separate statement].) Generally, the Court will not deny a discovery motion on the ground that the moving party failed to submit a separate statement if the parties’ arguments are fully developed in their moving papers and the lack of a separate statement will not prevent the Court from addressing the merits of the motion. (See Mills, supra, 166 Cal.App.4th at p. 894.)

Plaintiffs are correct that SuperShuttle’s motion is not accompanied by a separate statement and that SuperShuttle’s failure to supply a separate statement violates California Rules of Court, rule 3.1345. However, the discovery dispute in this case only involves three document requests and SuperShuttle’s arguments concerning the requests are fully set forth in its memorandum in support of its motion. Accordingly, the Court will overlook SuperShuttle’s failure to file a separate statement and address the merits of the motion.

B. Legal Standard

Upon motion reasonably made, the court may make an order quashing a subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as it shall declare, including protective orders. (CCP, § 1987.1, subd. (a).) In addition, the court may make any other order as may be appropriate to protect against unreasonable or oppressive demands, including unreasonable violations of the right to privacy. (Id.)

As a general rule, the party objecting to discovery bears the burden of defending its objections. (See Fairmont Ins. Co. v. Sup. Ct. (2000) 22 Cal.4th 245, 255.)

C. Analysis

The business record subpoena served on SuperShuttle seeks the following three documents:

1. The Franchise Agreement between SuperShuttle and Steve and Benny;
2.
3. The Franchise Agreement between SuperShuttle and the company formed by Steve and Benny; [and]
4.
5. The insurance policy that Steve and Benny were required to buy from SuperShuttle due to operating at San Francisco International Airport. (Decl. of Hagopian in Support of Mot. to Quash, Ex. F.)
6.
As indicated above, SuperShuttle asserts that these documents are irrelevant and contain protected trade secret information. For the reasons set forth below, SuperShuttle has failed to justify either of these objections.

1. Relevance

Concerning the relevance of the documents, SuperShuttle asserts that “[t]here is no legitimate factfinding purpose to plaintiffs’ subpoena,” and that the documents “are not related to any theory advanced in the pleadings.” (Mem. in Support of Mot. to Quash, pp. 1, 5.) According to SuperShuttle, the only way in which these documents could be relevant is if the principle of respondeat superior applied, rendering SuperShuttle liable for the actions of its employee. SuperShuttle points out that vicarious liability only attaches where the allegedly tortious acts are committed by an employee during the course and scope of his or her employment and that, pursuant to what is known as the “going and coming” rule, employers are generally exempt from liability for tortious acts committed by employees while on their way to and from work. (Id., p. 6, citing Moradi v. March USA, Inc. (2013) 219 Cal.App.4th 886, 894.)

Based upon this principle, and the undisputed fact that Arya was driving his own vehicle on the way home from work when the accident occurred, SuperShuttle contends that respondeat superior is facially inapplicable and that, by voluntarily dismissing SuperShuttle from the case, Plaintiffs have essentially conceded that facts do not exist to support the theory of vicarious liability.

Plaintiffs disagree with SuperShuttle’s relevance analysis, asserting that an exception to the “going and coming” rule may apply in this case and that, in any event, Plaintiffs should be permitted to gather information concerning Steve and Benny (who are SuperShuttle franchisees and the persons to whom Arya reported for work) to explore the nature of Arya’s job duties and whether facts exist to support an exception to the “going and coming” rule. The Court agrees with Plaintiffs that the documents are within the permissible scope of discovery.

Code of Civil Procedure section 2017.010 provides, in part, that “any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” It is well-settled that, in the discovery context, relevance is to be construed liberally in favor or disclosure (see Emerson Electric Co. v. Sup. Ct. (1997) 16 Cal.4th 1101, 1107), and “the standard is relevancy to the subject matter, which is determined by potential, not actual, issues in the case.” (National Steel Products Co. v. Sup. Ct. (1985) 164 Cal.App.3d 476, 492 [emphasis added].) Case law makes clear that the “relevancy of the subject matter” criterion is “a broader concept than ‘relevancy to the issues.’” (Pac. Tel. and Tel. Co. v. Sup. Ct. (1970) 2 Cal.3d 161, 172.) “For discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.” (Gonzalez v. Super. Ct. (1995) 33 Cal.App.4th 1539, 1546.)

The operative questions are whether the documents might reasonably assist Plaintiffs in evaluating their case and whether the information might reasonably lead to the discovery of admissible evidence. The Court answers both of these questions in the affirmative.

As Plaintiffs point out, a well-known exception to the going-and-coming rule exists where the employee’s use of his or her own vehicle gives some incidental benefit to the employer. (Moradi v. March USA, Inc. (2013) 219 Cal.App.4th 886, 895.) “The question is not who owns the vehicle . . . , or whether the employee receives reimbursement by the employer for the vehicle . . . , or whether the employee performs a personal errand while driving home.” (Id., at p. 904, quoting State Farm Mut. Auto. Ins. Co. v. Haight (1988) 205 Cal.App.3d 223, 241.) Rather, “[t]he key inquiry is whether there is an incidental benefit derived by the employer.” (Haight, supra, 205 Cal.App.3d at p. 241.) In determining whether there is an incidental benefit to the employer, the courts have held that an injury that occurs during a local commute to a fixed place of business at fixed hours is not within the scope of employment. (Moradi, supra, 219 Cal.App.4th at p. 898, quoting Hinojosa v. Workmen’s Comp. Appeals Bd. (1972) 8 Cal.3d 150 [“The decisions have thereby excluded the ordinary, local commute that marks the daily transit of the mass of workers to and from their jobs; the employment, there, plays no special role in the requisites of portage except the normal need of the presence of the person for the performance of the work.”].) By negative implication, if the commute does not take place during normal business hours to a fixed place of business as part of the local commute that marks the daily transit of the mass of workers to and from their jobs, the driving to and from work may be considered an incidental benefit to the employer.

The question of whether the going-and-coming rule applies in this case or whether an exception to that rule applies is not properly before the Court. That question is a substantive matter that is properly the subject of a dispositive motion or for the factfinder at trial. Put another way, in ruling on discovery matters, the Court does not decide substantive legal questions or make determinations of fact that bear on those questions.

Here, the question is simply whether the documents Plaintiffs seek relate to a potential claim or whether the information in the documents will help Plaintiffs evaluate their case. In support of their contention that the information would help them evaluate the case, Plaintiffs point out that, although Arya was driving his own vehicle at the time of the accident, according to his deposition testimony, he was required to drive to and from work at hours that could be considered not within the “local commute that marks the daily transit of the mass of workers to and from their jobs.” (Moradi, supra, 219 Cal.App.4th at p. 898.) Similarly, Arya testified that he was required to drive to different locations to pick up the SuperShuttle van prior to his shifts. Based upon this testimony, the Court finds that the question of whether Arya’s employer derived an incidental benefit from Arya driving his own vehicle to and from work is at least potentially at issue in this case.

Moreover, the persons that would most likely have the information concerning Arya’s job duties are Steve and Benny, both of whom are believed to be franchisees of SuperShuttle. Plaintiffs have been unable to locate Steve and Benny and indicate in their papers that SuperShuttle has expressed that it has this information. It seems self-evident that, in evaluating whether Plaintiffs should seek to hold Arya’s employers liable, Plaintiffs would need to discover information concerning the persons to whom Arya reported for work. Simply put, the information concerning Steve and Benny would help Plaintiffs evaluate their claims.

Based upon the above discussion, the Court finds that the documents sought in the business records subpoena are relevant for the purposes of discovery. SuperShuttle’s relevance objection is therefore overruled.

2. Trade Secrets

SuperShuttle argues that the business records subpoena should be quashed because the franchise agreements contain commercially sensitive trade secrets.

Evidence Code section 1060 establishes a privilege for trade secret information. For good cause shown, the court may enter a protective order related to an inspection demand indicating “[t]hat a trade secret or other confidential research, development, or commercial information not be disclosed, or be disclosed only to specified persons or only in a specified way.” (CCP, § 2031.060, subd. (b)(5).)

The party claiming the trade secret privilege has the burden of establishing its existence. (Bridgestone/Foirestone, Inc. v. Super. Ct. (1992) 7 Cal.App.4th 1384, 1393 (“Bridgestone”).) To carry this burden, the party seeking the protective order must provide an affidavit or declaration listing the declarant’s qualifications to give an opinion, identifying the alleged trade secret, identifying the documents disclosing the trade secret, and presenting evidence that the secret qualifies as a “trade secret.” (See Stadish v. Super. Ct. (1999) 71 Cal.App.4th 1130, 1144-1145].) If the existence of the trade secret is established, the party seeking discovery must then make a prima facie particularized showing that the information sought is relevant and necessary to the proof of a material element of one or more causes of action and that it is reasonable to conclude that the information is essential to a fair resolution of the lawsuit. (Bridgestone, supra, 7 Cal.App.4th at p. 1393.) The holder of the privilege must then demonstrate any claimed disadvantages of a protective order. (Id.)

SuperShuttle has not carried its initial burden of establishing that the franchise agreements contain trade secrets warranting protection under Evidence Code section 1060. In the declaration in support of SuperShuttle’s motion, counsel declares that SuperShuttle expends much effort, time, and money in preparing its franchise agreements, including the specific financial information contained in the subpoenaed agreements. (Decl. of Hagopian in Support of Mot. to Quash, ¶ 12.) Counsel further declares that SuperShuttle does not publicly disclose the content of those franchise agreements, and doing so would be damaging to SuperShuttle by revealing propriety information about its business operations. (Id.)

The declaration submitted by SuperShuttle’s counsel does not meet the requirements of what must be demonstrated to establish the existence of a trade secret under the holding in Bridgestone/Firestone. Specifically, the declaration does not set forth the declarant’s qualifications to give an opinion on the alleged trade secret or how the information derives independent economic value from not being generally known to the public or to other persons who can obtain economic value from its disclosure. (See Stadish, supra, 71 Cal.App.4th at pp. 1144-1145; see also Civ. Code, § 3426.1, subd. (d)(1) and (2) [setting forth the requirements for information to be qualified as a trade secret].)

Based upon the above discussion, SuperShuttle has not justified its objection to the subpoena on the basis of trade secret protection. The objection is therefore overruled.

3. Conclusion

The Court finds that the information sought by Plaintiffs’ subpoena is relevant for discovery purposes and that SuperShuttle has not justified its objection to the discovery on the basis of trade secret protection. Consequently, SuperShuttle’s motion to quash the subpoena and for a protective order prohibiting Plaintiffs from serving the company with any additional subpoenas is DENIED.

D. Request for Monetary Sanctions

SuperShuttle requests monetary sanctions against Plaintiffs, their guardian ad litem, and their counsel in the amount of $2,822.50 under Code of Civil Procedure section 1987.2. That provision states that “[i]n making an order pursuant to a motion made under . . . section 1987.1, the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorneys’ fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (CCP, § 1987.2.)

Given that the Court is denying SuperShuttle’s motion to quash, the Court finds that Plaintiffs did not act in bad faith or without substantial justification in opposing the motion. SuperShuttle’s request for monetary sanctions is therefore DENIED.

Conclusion and Order

SuperShuttle’s motion to quash the subpoena and for a protective order prohibiting Plaintiffs from serving the company with any additional subpoenas is DENIED. Accordingly, SuperShuttle shall respond to Plaintiff’s deposition subpoena for production of business records within 20 calendar days of the filing of this Order.

SuperShuttle’s request for monetary sanctions is DENIED.