Case Name: Arthrocare Corp., et al. v. Source One Cable Technology, Inc.
Case No.: 1-14-CV-261830

According to defendant Source One Cable Technology, Inc. (“Defendant”), plaintiffs ArthroCare Corporation and ArthroCare Costa Rica, S.R.L. (collectively, “Plaintiffs”) filed a complaint on March 7, 2014, attaching an unredacted copy of the contract at issue in this litigation. (See Def.’s memorandum of points and authorities in support of motion to seal, pp.2:6-8, 4:1-2, 5:11-12, 6:4-6, 7:5-6; see also Davis decl. in support of motion to seal, ¶ 4.) Defendant has also filed exhibits to a declaration and exhibits to its own cross-complaint relating to the contract, and contends that each of those exhibits in their entirety—including the contract—are trade secrets and confidential information that is subject to a binding agreement not to disclose and thus, moves to file all of those exhibits under seal.

However, according to Defendant’s arguments, the documents would no longer have trade secret protection as of the date of the filing of the complaint with the contract. (See DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864, 881 (stating that “[o]nce the data that constitute a trade secret are disclosed to others, or others are allowed to use those data, the holder of the trade secret has lost his property interest in the data”).) Moreover, the proposed sealing is not narrowly tailored. (See Cal. Rule of Court 2.550, subd. (d)(4).) It is unclear as to how some particulars would constitute trade secrets, and there is not enough specific, non-conclusory facts in the declaration supporting the existence of an overriding interest that overcomes the public access. (See In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 305; id. at 309 (stating that “when asserting methods and techniques and know-how to be trade secrets, a reasonable degree of precision and specificity is appropriate”).)

Defendant also seeks to seal certain exhibits to a declaration in support of a demurrer and motion to strike, but, the Court does not consider matters not subject to judicial notice on those motions, and Defendants do not request judicial notice of the exhibits. (See Silguero v. Creteguard, Inc. (2010) 187 Cal.App.4th 60, 64 (stating that “[t]he hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable”); see also Johnson v. Honeywell Internat. Inc. (2009) 179 Cal.App.4th 549, 559-560 (stating that “[t]he hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff”); see also Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 605; see also Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) Even if there existed an overriding interest that overcomes the right of public access to the record, there is a less restrictive means to achieve such an overriding interest. (See Rule of Court 2.550, subd. (d)(5).)
Accordingly, Defendant’s motion to seal documents is DENIED. The clerk shall return the lodged record to Defendant’s counsel, unless, within 10 days, Defendant notifies the clerk in writing that the record is to be filed. (See Rule of Court 2.551, subd. (b)(6).)

Defendant also moves for trial preference pursuant to Code of Civil Procedure section 36, subdivision (e). Section 36 allows for trial preference in situations where: a party to a civil action is over 70 years old and has health issues that require an expedited trial; a party is under 14 years of age and is involved in a wrongful death or personal injury action, necessitating an expedited trial; or where “the interests of justice will be served by granting preference.” (See Code Civ. Proc. § 36, subds. (a)-(e).) Here, Defendant fails to make a showing that satisfies the Court that the interests of justice will be served by granting this preference. Defendant’s motion for trial preference is DENIED.

On April 4, 2014, Plaintiffs filed the first amended complaint (“FAC”), asserting causes of action for declaratory relief and breach of contract. Defendant demurs to the entirety of the FAC on the grounds that: Plaintiffs violated their contractual obligations in commencing the action; and, the FAC fails to state facts sufficient to constitute any cause of action. The first ground is not a basis for demurrer. (See Code Civ. Proc. § 430.10, subds. (a)-(h).) As to the second ground, Defendant argues that the first cause of action for declaratory relief is strategically motivated and improper, and the second cause of action fails to attach the contract at issue, or allege the legal effect of the contract. Defendant’s demurrer is OVERRULED in its entirety. The first cause of action alleges facts sufficient to constitute a declaratory relief claim, and the second cause of action for breach of contract likewise alleges the existence of a contract. (See Acoustics, Inc. v. Trepte Construction Co. (1971) 14 Cal.App.3d 887, 913.)

The applications for admission pro hac vice of attorneys Daniel C. Bitting and Cynthia Saiter Connolly were properly served, are unopposed and are GRANTED. The Court will sign the proposed orders.