Brightedge Technologies, Inc. v. Gabriel Martinez

Brightedge Technologies, Inc. v. Gabriel Martinez CASE NO. 113CV256794
DATE: 24 October 2014 TIME: 9:00 LINE NUMBER: 23

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 Thursday 23 October 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 24 October 2014, the motion of Plaintiff Brightedge Technologies, Inc. (“Plaintiff”) for a protective order designating portions of documents previously filed by Plaintiff as confidential pursuant to the existing Stipulated Confidentiality Order in this matter, was argued and submitted.  Third party Searchmetrics, Inc. (“Searchmetrics”) filed a formal opposition to the motion.

  1. Statement of Facts

This action arises from allegations that Defendant Gabriel Martinez (“Defendant”) took Plaintiff’s confidential information and trade secrets with him when he left Plaintiff’s employ and went to work for a business competitor, Searchmetrics, Inc.  Plaintiff filed this action against Defendant Martinez only on 26 November 2013.  Plaintiff has chosen not to sue Searchmetrics in this action although it sued Searchmetrics in federal district court in March 2014.

  1. Discovery Dispute

On 14 April 2014 the Court entered a confidentiality order in this action stipulated to by Plaintiff and Defendant Gabriel Martinez.  Among other things the confidentiality order provides that the litigants and third parties may designate documents as confidential to varying degrees, that other participants in the case (such as Searchmetrics) may challenge such a designation, and that when an impasse is reached the party seeking to designate documents as confidential must bring a motion for another protective order specifically addressing any disputed confidentiality designations within a specific period of time.

In support of a previous motion, to compel production of documents pursuant to a business records subpoena served on Searchmetrics, Plaintiff on 6 August 2014 filed a Notice of Motion and Motion, a Declaration from Barrett Foster (“Foster Decl.”) and a Declaration from Trent Livingston (“Livingston Decl.”).  On the same date Plaintiff also filed a motion to seal those three documents.  Plaintiff initially refused to serve Searchmetrics, the party it was seeking to compel, with unredacted copies of these documents.  Plaintiff then filed the present motion for a protective order covering these three documents on 9 September 2014.

Searchmetrics filed its opposition to the motion for protective order on 3 October 2014.  The meet and confer communications surrounding these motions demonstrate that Searchmetrics disputes Plaintiff’s interpretation of the confidentiality order and whether some of the material Plaintiff sought to designate as “attorney’s eyes only” (“AEO”) or “highly confidential” qualifies for such a designation under the confidentiality order.

Both the motion to compel and motion to seal were heard by the Court on 10 October 2014.  The Court denied the motion to compel but granted the motion to seal.  While the granting of the motion to seal may have rendered this motion somewhat moot as a practical matter, Plaintiff and Searchmetrics still dispute the proper interpretation of the confidentiality order and this motion, continued by the Court to its current date, has not been taken off calendar.

III.     Discussion

  1. Motion for Protective Order

Plaintiff seeks an order giving the following portions of the previously filed (and now sealed) documents the following designations under the confidentiality order: (1) The Notice of Motion and Motion to Compel at 4:9-11 (highly confidential); (2) the Foster Decl. at 1:20-17 (highly confidential); (3) Foster Decl. at 2:8-3:5 and 3:7-9 (confidential); (4) Foster Decl. at 3:14-15 (confidential); (5) Foster Decl. at 4:1-2 and 4:14-15 (confidential); (6) Foster Decl. at 4:23-5:2 (confidential); (7) Foster Decl. at 5:8-12 and 15-16 (confidential); (8) Foster Decl. at 6:16-19 (confidential); (9) Foster Decl. at 7:24-25 (highly confidential), and; (10) Livingston Decl. at 8:12-19 (highly confidential).

Searchmetrics in its opposition to the present motion states that it has “never challenged the six Confidential designations, but did properly challenge [Plaintiff’s] four AEO [attorneys’ eyes only, highly confidential] designations under sections 6.2 and 6.3 of the confidentiality order.”  Opp. at 1:7-9, brackets added.  Accordingly only proposed designations 1, 2, 9 and 10 are at issue here.

  1. Legal Standard

Any party may move for a protective order in response to a demand for inspection.  (Code Civ. Proc. (“CCP”), § 2031.060, subd. (a).)  The court may make any order that justice requires to protect the party from unwarranted annoyance, embarrassment, or oppression.  (CCP, § 2031.060, subd. (b).)  The issuance and formulation of protective orders are to a large extent discretionary.  (Raymond Handling Concepts Corp. v. Super. Ct. (1995) 39 Cal.App.4th 584, 587-588.)  However, the court must balance the interests of the public, the plaintiff and the defendant by requiring the party seeking to restrict dissemination of discovered information to demonstrate “good cause” for the restriction.  (Westinghouse Electric Corp. v. Newman & Holtzinger (1995) 39 Cal.App.4th 1194, 1208-1209; see also CCP, § 2031.060, subd. (b).)

The court also has the power to enforce valid stipulations, as an authorized stipulation that is in proper form is binding upon the parties and the Court.  (1 Witkin, Cal. Procedure (5th ed. 2008) Attorneys, § 264 [citations omitted].) Stipulations are governed by ordinary contract rules.  (Id. at § 278.)   As with contracts, generally, “It is . . . solely a judicial function to interpret a written instrument unless the interpretation turns on the credibility of extrinsic evidence.”  (Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal. 2d 713, 724.)

  1. Stipulated Confidentiality Order

A Stipulated Confidentiality Order (“SCO”) drafted by counsel for Plaintiff and Defendant Martinez was filed in this matter on 14 April 2014.

Section 6 of the SCO provides the agreed upon procedures for “Challenging Confidentiality Designations.”

Section 6.2 (“Meet and Confer”) requires that a party wishing to challenge a confidentiality designation of a document or documents must first give written notice to the designating party.  It states in pertinent part that “[t]o avoid ambiguity as to whether a challenge has been made, the written notice must recite that the challenge to confidentiality is being made in accordance with this specific paragraph of the Order.  The parties shall attempt to resolve each challenge in good faith and must engage in the process by conferring directly (in voice to voice dialogue; other forms of communication are not sufficient) within 14 days of service of notice.”

Section 6.3 (“Judicial Intervention”) states in pertinent part that “[i]f the Parties cannot resolve a challenge without court intervention, the Designating Party shall file and serve a motion for protective order within 21 days of the initial notice of challenge or within 14 days of the parties agreeing that the meet and confer process will not resolve their dispute, whichever is later.  Each such motion must be accompanied by a competent declaration affirming that the movant has complied with the meet and confer requirements imposed in the preceding paragraph.  Failure by the Designating Party to make such a motion including the required declaration within the above time period shall automatically waive the confidentiality designation for each challenged designation.  . . .  The burden of persuasion in any such challenge proceeding shall be on the designating party.”

  1. Analysis

Searchmetrics makes two arguments against the motion; that it is untimely under the terms of the SCO and that Plaintiff has failed to meet its burden to show that the four passages proposed to be designated “highly confidential” or “AEO” qualify for such a designation.

  1. Timeliness of the motion

The present motion was filed on 23 Sept. 2014.  Plaintiff asserts that the motion is timely because “both parties did not agree that the meet and confer process was exhausted until September 12.  Up until that date Plaintiff was seeking to address Searchmetrics’ concerns and provided proposed revisions to the confidentiality designations to Searchmetrics on Thursday, August 4.  While Searchmetrics repeatedly tried to stop the ongoing process of meeting and conferring, [Plaintiff] continued to try to seek agreement rather than rushing off to file a motion with this Court.  . . .  [T]he language of the protective order is plain that the time to file this motion is within 14 days of the parties ‘agreeing that the meet and confer process will not resolve their dispute’ (emphasis added).  Here, Plaintiff continued to believe that it could resolve Searchmetric’s concerns until Searchmetric’s rejection of Plaintiff’s revised positions on September 12.  The parties therefore did not agree that the dispute required this Court’s intervention until September 12.  As the date of this filing is within fourteen days of Sept. 12, the motion is therefore timely.”  Plaintiff’s Motion at 2:13-3:2.

Plaintiff notably has not submitted any of the meet and confer communications as evidence to support this argument, which is understandable as that correspondence completely undermines it.  The only evidence submitted that relates to the timeliness of the motion is a circumspect declaration from Plaintiff counsel Jon V. Swenson (“Swenson Decl.”).  Mr. Swenson simply states (at 2) that he participated in meet and confer efforts on 19 August and “agreed to continue considering” his client’s positions.  He then states that two weeks later on 2 September 2014, counsel for Plaintiff sent Searchmetrics an email “to continue the process of meeting and conferring.”  Unidentified “revised positions” were sent to Searchmetrics on 4 September and rejected on 12 September.  Swenson Decl. at 3-4.

In the Opposition, Searchmetrics argues that Plaintiff’s version of events “ignores that on August 19, Searchmetrics unequivocally confirmed orally and in writing that it would not further negotiate and would not reconsider its challenge to any of [Plaintiff’s] AEO designations in its motion to compel or the Foster and Livingston declarations.  [Plaintiff] believes that section 6.2 and 6.3 of the SCO can reasonably be interpreted to allow a party to ignore all subjective and objective evidence that the meet and confer is over by failing to confirm that the meet and confer is over.  This is not a reasonable interpretation of sections 6.2 and 6.3 of the SCO or the actual meet and confer that ended on August 19.  [Plaintiff] disingenuously claims that it ‘continued to believe it could resolve Searchmetrics’ concerns . . . until September 12,’ such that [Plaintiff] did not agree until September 12 that the meet and confer process would not resolve the dispute.  However, Searchmetrics has maintained the exact same position since it invoked sections 6.2 and 6.3 on August 11, repeated that exact same position during the hour-long meet and confer phone call on August 19, and confirmed its exact same position in writing on August 19 after the phone call: all of [Plaintiff’s] AEO designations are improper.  Thus, the actual date that the meet and confer process ended was on August 19, when [Plaintiff] continued to insist that it properly designated certain information as AEO and Searchmetrics insisted it had not.  Since August 19 was 35 days before [Plaintiff] filed its motion for protective order, its motion is untimely under section 6.3 of the SCO.  Viewing this situation in the light most favorable to [Plaintiff] the meet and confer was over by ‘agreement’ on September 4 when [Plaintiff] confirmed in an email that it would not withdraw the four AEO designations addressed by this motion after Searchmetrics’ September 2 emails.   . . . September 23, is 19 days after September 4 and thus its motion is untimely under section 6.3 of the SCO.”  Opp. at 5:1-6:5, internal citations omitted, brackets added.

The Opposition is supported by a declaration from Searchmetrics’ Counsel Rajiv Dharnidharka (“Dharnidharka Decl.”) with copies of various meet and confer communications (emails) attached as exhibits 1 through 3.  Exhibit 1, an email chain between counsel for Searchmetrics and counsel for Plaintiff dating from 7 August to 14 August 2014, makes it clear that counsel for both sides arrived at their current positions almost immediately, and Searchmetrics clearly stated its intention to challenge the AEO designations by no later than 12 August.  An email from Searchmetrics’ Counsel Dharnidharka to Plaintiff Counsel Swenson dated 6:34 PM on 11 August stated in pertinent part “consider this email as the initiation of the Section 6.2 meet and confer of the state court confidentiality order.  We need to have a telephonic meet and confer within 14 days per section 6.2.  I suggest we have the call on Wednesday [13 Aug].”  Brackets added.

Exhibit 2 consists of an email chain between counsel dated from 7 August to 19 August 2014 for the most part representing the efforts to schedule the meet and confer telephone call required by section 6.2 of the SCO, which was delayed by Plaintiff several times.  The conversation eventually took place on 19 August.  At the conclusion of that call Searchmetrics’ counsel Dharnidharka sent an email to Plaintiff’s Counsel Swenson and Boggs stating: “I write to confirm that we just spoke for over an hour regarding the redactions and ‘Highly Confidential—Attorneys’ Eyes only’ designations made by [Plaintiff] to its August 6 motion to compel directed at Searchmetrics . . . pursuant to Section 6.2 of the confidentiality order as amended.  I write to confirm that Searchmetrics believes that each and every one of these redactions and ‘Highly Confidential—Attorneys’ Eyes Only’ designations is improper and must be withdrawn for all the reasons discussed.  To the extent [Plaintiff] disagrees with Searchmetrics, the parties have reached an impasse and there is nothing more we could possibly discuss.  Therefore, pursuant to Section 6.3, [Plaintiff] has 14 days from today to move for an order to maintain any designation it seeks to keep in place.”  Brackets added.

In a responding email Plaintiff argued (also on 19 Aug.) that its time to file a motion had not yet begun to run because the parties had purportedly not yet exhausted the meet and confer process.   Counsel for Searchmetrics responded that “Based on the content redacted and designated Highly Confidential—Attorneys’ Eyes Only, there is nothing [Plaintiff] could say or do to change Searchmetrics’ position.  The content in question simply does not qualify for the designation or redaction.  There is nothing further for Searchmetrics to consider or discuss.  The section 6.3 14 day clock has started . . .”  (Dharnidharka Decl., Ex. 3.)  On being told that Plaintiff’s counsel had yet to discuss the issue with its’ client, Searchmetrics’ counsel (also on 19 Aug.) again stated in pertinent part that: “To be clear: Searchmetrics is not reconsidering any of its positions with respect to this issue so there is nothing to further discuss.  . . .  In total, you have several emails from me expressing Searchmetrics’ position (see below) and we spoke for more than an hour.  The fact that you have not discussed my prior emails with your client does not extend the Section 6.3 clock.  [Plaintiff] has 3 options now: (1) it can expressly and voluntarily withdraw some or all of its redactions and designations before September 2; (2) it can bring a motion pursuant to section 6.3 on or before September 2 to seek to maintain some or all of its designations; or (3) it can do nothing and the designations are deemed withdrawn on September 3.”  (Dharnidharka Decl., Ex. 3.)  Plaintiff responded that it disagreed at which point Searchmetrics stated—for the third time on 19 August—that “[t]here is nothing more to discuss.  You have Searchmetrics’ position.  If you disagree, bring a motion pursuant to Section 6.3.”

After this clear statement by Searchmetrics and 14 days of apparent silence on the topic, Plaintiff’s counsel sent to Searchmetrics’ counsel an email at 9:51 pm on 2 September, “to continue the process of meeting and conferring on our dispute over the information filed under seal in [Plaintiff’s] motion to compel and supporting papers.”  Searchmetrics’ counsel immediately responded that Plaintiff’s “deadline to move to maintain the designations expired today per section 6.3 of the confidentiality order.  The meet and confer ended 14 days ago.”  (Dharnidharka Decl., Ex. 3.)

  1. Qualification for Highly Confidential designation

Plaintiff contends that the four portions of documents at issue (1, 2, 9 and 10 above) qualify for the “highly confidential” designation because they either: explicitly discuss Plaintiff’s business model and the structure of its profit margins, disclose information about its pricing models, or identify customers and sales prospect opportunities.  It asserts that because this information qualifies (in its opinion) as trade secrets it qualifies as “highly confidential” under SCO.  This argument is supported by a declaration from Barrett Foster, a Vice President of Sales with Plaintiff.

In Opposition Searchmetrics responds that Plaintiff has not met its burden of persuasion under the SCO as the material in question consists of: “a principle likely taught in every business school sales class and known by all sales representatives in every industry,” mere pricing information generally available on the internet and not a pricing model, and the mere names of large companies that are customers of Plaintiff that have purportedly been used by Plaintiff in press releases and marketing materials.

  1. Conclusion

Plaintiff’s interpretation of section 6 of the SCO is unreasonable and does not meet its burden of persuasion to establish that this motion is timely.  Under Plaintiff’s view the provisions of section 6 of the SCO describing the timing for bringing disputes to the Court for resolution are essentially meaningless as Plaintiff can prevent the clock from beginning to run and file a motion whenever it pleases by simply refusing to acknowledge a clear statement of disagreement from any another participant in the litigation.

Plaintiff’s specific argument that the word “agreeing” used in section 6.3 of the Order must be interpreted as requiring some kind of joint communiqué from however many disagreeing participants there may be before a dispute can be brought before the Court is particularly unreasonable.  Under this view the timing provisions of section 6.3 are useless as any participant in the litigation can block any other participant from bringing a dispute to the Court by refusing to agree that there is an impasse.  The notion that Plaintiff is empowered to declare if and when Searchmetrics (or any other participant) has taken their final position is without any reasonable basis and reduces section 6 of the confidentiality order to a tool for gamesmanship.

It is the Court’s interpretation of the Order’s provisions, and not that of any party or participant, that controls.  Whether or not participants in this litigation “agree” that they have reached the point that they cannot resolve their differences without court intervention as described in section 6.3 of the SCO is determined by applying an objective standard.

Applying that standard, the Court finds that the 19 August 2014 email communication from Searchmetrics following the required direct meet and confer discussion on the AEO designations, including the follow up statements that same day wherein Searchmetrics made its disagreement indisputable, started the 14 day period in which Plaintiff could bring a timely motion for a protective order under section 6.3 of the SCO.  That 14 day period came to an end on 2 September 2014.  The 9:51 p.m. 2 Sept email from Plaintiff’s counsel cannot be reasonably interpreted as reopening, much less continuing, any meet and confer discussion on the four AEO designations.  Indeed, coming as it did after close of business on the day on which the 14 day period to bring a motion had expired, its only likely purpose was to provide (very weak) support for Plaintiff’s argument that this motion is timely because the meet and confer process had somehow continued without Searchmetrics’ knowledge or participation until Plaintiff was ready to file its motion.

Given the Court’s finding that the motion is untimely and DENIED on that basis, it is not necessary for the Court to address whether the material at issue qualified for the proposed designation.

  1. Conclusion and Order

The motion for protective order is DENIED as untimely.  Plaintiff’s proposed AEO/ “Highly Confidential” designation for the material in designations 1, 2, 9 and 10 has therefore been waived pursuant to section 6.3 of the SCO.

 

 

________________­­­____________

DATED:

_________________________­­­________________________

HON. SOCRATES PETER MANOUKIAN

Judge of the Superior Court

County of Santa Clara

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