Case Number: 19STCV22776 Hearing Date: March 10, 2020 Dept: 20

Tentative Ruling

Judge David J. Cowan

Department 20

Hearing Date: Tuesday, March 10, 2020

Case Name: Blended Clothing, Inc. v. CLM California Design Corporation

Case No.: 19STCV22776

Motion: Quash Deposition Subpoena

Moving Party: Plaintiff Blended Clothing, Inc.

Responding Party: Defendant CLM California Design Corporation

Notice: OK

Ruling: Plaintiff Blended’s Motion to Quash Deposition Subpoena is DENIED, without prejudice to Chico’s right to oppose the deposition subpoena.

CLM’s request for monetary sanctions is GRANTED in the total amount of $800.00 payable to CLM within 30 days of this order by Blended’s counsel, LPL Lawyers.

Moving party to give notice.

BACKGROUND

On January 18, 2019, Plaintiff Blended Clothing, Inc. (“Blended”) issued a written purchase order to Defendant CLM California Design Co. (“CLM”) for printing services on fabric provided by Blended.

From February 15 to February 19, Blended sold shirts printed by CLM to retailer Chico’s FAS, Inc. (“Chico’s).

On March 24, 2019, Chico’s gave Blended notice of issues with colors bleeding from the provided shirts.

On June 27, 2019, Blended filed a Complaint against CLM stating causes of action for breach of contract, fraud, and breach of the implied covenant of good faith and fair dealing.

On July 9, 2019, Blended filed its First Amended Complaint against CLM stating causes of action for breach of contract, negligence, equitable indemnity, and declaratory relief.

On September 4, 2019, CLM filed a Cross-Complaint against Blended, stating causes of action for open book account, account stated, services rendered, and reasonable value of services rendered. CLM also filed an Answer to the First Amended Complaint.

On October 1, 2019, CLM served Blended with a Notice of Deposition Subpoena for Production of Business Records directed to Chico’s, seeking production of documents related to the “Project” between Blended and Chico’s involving CLM’s shirts.

On October 25, 2019, Blended filed a Motion to Quash Deposition Subpoena.

On February 26, 2020, CLM filed an Opposition to the Motion to Quash.

On March 3, 2020, Blended filed a Reply.

DISCUSSION

Initially, the Court notes the Motion to Quash is unusually brief—the memorandum of points and authorities is only one page long. Blended argues any requests for documents from 2018 to present are overbroad, since Blended issued its purchase order to CLM on January 18, 2019 and the damages occurred in March of 2019. Blended argues Requests no. 5-7 are “vague and ambiguous” because they use the phrase “sample approval phase.” However, “sample approval phase” is defined in the subpoena itself, and Blended does not elaborate on how the term is vague or ambiguous. Finally, Blended argues Requests no. 9-11 and 13-19 seek private or confidential material protected by “confidentiality provisions, along with state and federal trade laws.” Blended fails to explain what it means by “confidentiality provisions,” fails to identify any applicable state or federal trade law, and does not provide any facts or argument in support of its assertion of privilege. (See CCP § 2031.240(c)(1) (“If an objection is based on a claim of privilege . . . the response shall provide sufficient factual information for other parties to evaluate the merits of that claim, including, if necessary, a privilege log”)) On the whole, the Motion to Quash fails to apprise CLM of the grounds for Blended’s privilege and ambiguity objections.

In its Reply, Blended substantially expands on its arguments and introduces new arguments. The Reply is five times longer than the original Motion to Quash. The Court will not consider any arguments raised for the first time in the Reply, as considering those arguments would severely prejudice CLM, which was unfairly deprived of an opportunity to respond to those points. Specifically, Blended argues for the first time that CLM failed to establish “that it does not possess the material to be discovered or if in its possession, that the material is unreliable”; that the subpoena improperly “attempt[s] to place the burden and cost of supplying information equally available to both [parties] solely upon the adversary”; that the phrase “Project,” as used in the subpoena, fails to sufficiently identify the requested information; and that the subpoena improperly seeks documents “regarding parties that are not part of this case or the project.” Additionally, Blended’s Reply expands its ambiguity argument from the Motion, now arguing the phrase “sample approval phase” is vague and ambiguous because it “references fact that lack any foundation and do not pertain to the subject matter”—i.e., reference facts not raised by Blended. This “lack of foundation” argument is, once again, newly raised in the Reply, and CLM was deprived of an opportunity to respond to it. These new arguments will be disregarded, as it would be highly improper and prejudicial for the Court to consider them.

Blended argues that “information such as costing, prices, trends, design processes, and manufacturing methods qualify as trade secrets that should not be disclosed without appropriate redaction.” Blended does not identify any “state . . . trade law,” even though it previously asserted protection thereunder. Indeed, Blended only cites 18 USC § 1839(3)—and its quote is highly misleading. Blended claims the “term ‘trade secret’ is defined in part as “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.” (18 USC § 1839(3)) Blended intentionally omits the critical part of the definition providing that the above only constitute trade secrets “if . . . the owner thereof has taken reasonable measures to keep such information secret; and . . . the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.” (Id.)

Blended has made absolutely no showing that any of the requested documents seek information Chico’s has taken “measures to keep . . . secret” or information that derives its value from staying secret. Indeed, Blended has not submitted any evidence (e.g., by affidavit) that the subpoena would impact Chico’s interests or uncover trade secrets. Accordingly, Blended’s assertion of trade secret privilege is baseless. Should Chico’s find that the requests impinge on its trade secrets, it is within its rights to oppose the deposition subpoena.

Blended also narrows its overbreadth argument, specifically arguing the only relevant time period for discovery from Chico’s is January 18, 2019 to April 15, 2019. This is unjustifiably narrow—CLM has indicated its defenses are based in part on events during the sample approval phase that began before January 18, 2019. (See Opposition, Ex. 2) Additionally, as CLM points out, every request for documents “2018-present” are limited to documents “regarding the Project,” which CLM claims began back in 2018. Blended does not address this point in its Reply, and simply claims that requests for documents before January 18, 2019 are overly burdensome and invade privacy. The Court also notes that Blended did not the proposed April 15, 2019 cutoff date in its Motion, so CLM could not address this in its Opposition.

Finally, Blended requests a protective order if the Court denies its Motion to Quash; however, these orders can only be granted “on motion of any party or other person affected by discovery sought.” (CCP 2017.020(a)) Here, Blended did not move for a protective order, and Blended has not indicated how the Court should restrict discovery. It is not clear the Court has unlimited discretion to fashion a protective order as it sees fit without input from the party requesting the order. Moreover, Blended fails to provide any separate grounds to limit discovery other than those already rejected above. Blended’s request for a protective order is denied.

CLM argues Blended brought this Motion to Quash solely to prevent CLM from obtaining discovery necessary for its defense. CLM intends on arguing that the fabric bleeding problems were caused by Blended improperly switching fabrics after the sample approval phase. As evidence for this point, CLM notes that Blended’s original Complaint alleged CLM had sold it inferior quality fabric which caused bleeding, but following the July 8, 2019 exchange where CLM states its anticipated defenses, Blended amended its complaint to allege that CLM’s printing on the fabric caused the bleeding instead. Indeed, Blended’s attempt to exclude any reference to a “sample approval phase,” its amendment to the Complaint, and its Motion to Quash all indicate Blended’s interest in suppressing evidence of previous fabric testing. Such evidence is critical to CLM’s proposed defense, and Blended has failed to adequately show any reason to restrict discovery. For the foregoing reasons, the Motion to Quash is DENIED. However, this order does not preclude Chico’s from opposing the deposition subpoena.

Sanctions

CLM has requested $2,000 in sanctions under CCP 1987.2 and CCP 2023.030(a). CCP 1987.2 authorizes the Court to “award the amount of the reasonable expenses incurred in making or opposing the motion [to quash a subpoena], including reasonable attorney’s 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.” Here, as explained above, Blended’s motion was apparently made in bad faith as part of a concerted effort to deprive CLM of access to discovery critical to its defense. Additionally, Blended’s tactical decision to make the vast majority of its argument in the Reply—depriving CLM of an opportunity to respond—constitutes bad faith litigation conduct. Finally, Blended failed to provide more than minimal support for its arguments, so the Motion was made without substantial justification. However, as the Court has indicated it will not consider several of Blended’s arguments in ruling on the motion, and part of CLM’s Opposition was not prompted by the content of Blended’s Motion, it appears reasonable to reduce the sanctions imposed. Accordingly, the Court GRANTS CLM’s request for monetary sanctions in the reduced amount of $800.00 for two hours of work at a rate of $400 an hour.

CLM’s request for monetary sanctions is GRANTED in the total amount of $800.00 payable to CLM within 30 days of this order by Blended’s counsel, LPL Lawyers.

Evidentiary Objection

CLM’s evidentiary objection to the Declaration of Ginam Lee submitted in support of the Motion to Quash Deposition Subpoena is GRANTED. “[D]eclarations setting forth only conclusions, opinions or ultimate facts are to be held insufficient.” (Greshko v. County of Los Angeles (1987) 194 Cal.App.3d 822, 852)

CONCLUSION

Blended’s Motion to Quash Deposition Subpoena is DENIED. Chico’s is not hereby precluded from opposing the deposition subpoena.

CLM’s request for monetary sanctions is GRANTED in the total amount of $800.00 payable within 30 days of this order by Blended’s counsel, LPL Lawyers.

Moving party to give notice.