NetApp, Inc. v. Nimble Storage, Inc., et al.		CASE NO. 114CV265454
DATE: 19 December 2014	TIME: 9:00	LINE NUMBER: 24

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 408.882.2310 and the opposing party no later than 4:00 PM Thursday 18 December 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 19 December 2014, the motion of plaintiff NetApp, Inc to seal records and the motion of defendant Nimble Storage, Inc. to compel compliance with an agreement to produce documents, and to compel further responses to its Request for Production of Documents, Set One, and its Special Interrogatories, Set One, was argued and submitted.  Plaintiff NetApp, Inc. filed formal opposition to Nimble’s motion to compel.  NetApp’s motion to seal is unopposed.  Neither party seeks sanctions in connection with any of the motions.

All parties are reminded that all papers must comply with Rule of Court 3.1110(f).[1]

1. Statement of Facts

This is an action for trade secret misappropriation and breach of contract.  According to the allegations of plaintiff NetApp, Inc.’s (“Plaintiff”/”NetApp”) Complaint, defendant Nimble Storage, Inc. (“Nimble”) engaged in a plot to target for hiring (and subsequently did hire) teams of Plaintiff’s employees for the purpose of utilizing Plaintiff’s proprietary information to obtain a competitive advantage in the data storage industry, where the parties are direct competitors with one another.

On May 16, 2014, Plaintiff filed the Complaint asserting the following causes of action: (1) trade secret misappropriation (against Nimble and others); (2) breach of contract (against defendant Weber); (3) breach of contract (against defendant Klute); (4) breach of contract (against defendant Binning); (5) breach of contract (against defendant Glick); (6) breach of contract (against defendant Alduino); (7) intentional interference with contract and contractual relations (against Nimble and defendant Weber); and (8) unfair competition (Bus. & Prof. Code § 17200, et seq.) (against all defendants).

On July 22, 2014, the Court (Hon. Elfving) sustained without leave to amend demurrers by Nimble and the individually named defendants to the 7^th and 8^th causes of action.

1. Discovery Dispute

On 11 June 2014 Nimble served NetApp with its Requests for Production of Documents and Things (“RPD”). Set One, and its Special Interrogatories (“SI”), Set One.  (See Declaration of Patrick Premo in support of Nimble’s Motion to Compel (“Premo Decl.”), ¶ 9.)  There were 42 RPDs and 29 SIs.

On 11 July 2014 Net App provided its initial responses to this discovery.  (Premo. Decl. ¶ 9-10 and Nimble Exhibits 23 and 26.)  In response to the RPDs, in addition to ineffective general objections, NetApp agreed to produce non-privileged documents in its possession, custody and control as to RPDs 2, 5, 7, 8, 15, 18, 20, 21, 25, 30, 33, 34, 35 and 38 and objected to and/or unilaterally narrowed the scope of the remaining RPDs.  See Nimble Exhibit 23.  In response to the SIs, in addition to ineffective general objections, NetApp cited Code Civ. Proc. §2030.230 in response to SI 1, 2, 6, 7 and 29 rather than provide substantive responses and initially responded to the remaining SI with objections only.  See Nimble Exhibit 26.

Over the next several weeks the parties attempted to meet and confer regarding this discovery.  See Nimble Exhibits 8-22.  On 9 October 2014 NetApp provided a first supplemental response to the RPDs.  See Nimble Exhibit 24.  On 20 November NetApp provided a second supplemental response to the RPDs and a first supplemental response to the Sis. See Nimble Exhibits 25 and 27.

On 25 November 2014 Nimble filed the motion(s) to compel.  On 8 December 2014 NetApp filed its opposition to the motions to compel.  Nimble filed its Reply on 12 December 2014.  NetApp filed its motion to seal on 8 December 2014.  Nimble does not oppose the motion to seal.

III.     Discussion

1. NetApp’s Motion to Seal

NetApp moves the Court for an order sealing (1) Page 12, lines 2-3 of Nimble’s Memo of Points and Authorities in support of its Motion to compel compliance and further responses, (2) NetApp’s First Supplemental Response to SIs, Set One, attached as Exhibit 27 to the Declaration of Patrick Premo in support of Nimble’s motion to compel, (3) Page 46, line 23 to page 47, line 6 and page 50, lines 9-10 of Nimble’s Separate Statement in support of its motion to compel, and (4) page 68, line 23 to page 69, line 8 and page 74, lines 9-11 of NetApp’s opposition Separate Statement.  See NetApp’s Notice of Motion to Seal at 1:17-2:3.

In support of the motion to seal, NetApp directs the Court to the parties’ stipulated protective order, approved by the Court on 30 July 2014.  A copy of this order is attached as Exhibit A to the Declaration of Patrick Salceda (“Salceda Decl.”) in support of the motion to seal.  The protective order allows the parties to designate documents as “Confidential,” and provides that when such material is lodged or filed with the Court it must be lodged conditionally under seal and a motion to seal the material in accordance with California Rules of Court, rule 2.551 must be filed.

NetApp was granted an extension of the deadline for filing the present motion by the Court (Hon. Folan) on 2 December 2014.  See Exhibit C to the Salceda Decl.  In accordance with the stipulated protective order NetApp asks the Court to seal the material identified above, to prevent public disclosure of its confidential information (information technology and human resources policies) and private information relating to many individual third parties (their past and current employers).

1. Relevant Law

A party may not file a record under seal without a court order. (Cal. Rules of Court, rule 2.551(a).) A court may not permit a record to be filed under seal based solely on the agreement or stipulation of the parties. (Id.) California Rules of Court, rule 2.551(b) requires that the party seeking to file documents under seal must file a motion that contains a notice of motion, memorandum of points and authorities, and a declaration containing facts sufficient to justify the sealing. A court has the authority to order that a record be filed under seal only if it expressly finds facts that establish (1) there exists an overriding interest that overcomes the right of public access to the record; (2) the overriding interest supports sealing the record; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. (Cal. Rules of Court, rule 2.551(d).)

“Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute overriding interests.” (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 298 n.3; see also NBC Subsidiary (KNBC-TV), Inc. v. Sup. Ct. (1999) 20 Cal.4th 1178, 1222 n.46 [overriding interests found in various cases include, inter alia, protection of trade secrets, protection of information within the attorney-client privilege, and enforcement of binding contractual obligations not to disclose]; Code Civ. Proc. [“CCP”], § 3426.5 [“In an action under this title, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.”].)

The California Rules of Court expressly indicate that the sealing rules do not apply to discovery motions, or records filed and lodged in connection with discovery motions. (Cal. Rules of Court, rule 2.550(a)(3).) The rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery proceedings. (Id.)

However, the Sixth Appellate District, in dicta, has interpreted the discovery exemption contained in the California Rules of Court as not precluding all discovery motions from the sealing requirements, but imposing a less strict set of requirements than those in the rules of court. (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 891-894 (“Fuller”).) The plaintiff in Fuller asserted that the rules of court did not apply, because the motion at issue was a discovery proceeding and was expressly exempted. (Id. at p. 892.) The court addressed the dangers of applying a categorical exemption of the sealing rules to all discovery motions. The court found it “absurd” to require “the moving party to expose the materials to public view, or to prove that there is an overriding interest against their disclosure” for routine discovery motions involving the “quintessentially procedural question of whether and under what conditions the materials must be produced in discovery.” (Id. at p. 893.) The court found that the strict sealing rules were more appropriate for discovery motions that were “not merely ancillary or preliminary to some larger litigation, but [are] the whole end and purpose of the case,” and that involved questions of great significance to the public. (Ibid.) The Fuller court did not decide the discovery exemption issue because the court found no substantial basis for maintaining the documents at issue under seal. (Id. at p. 894.)

2. Analysis

Having reviewed the documents conditionally lodged under seal, the Court finds that the parties complied with the requirements of the sealing rules to the extent required by the holding in Fuller—both parties lodged the documents at issue conditionally under seal, filed redacted documents to be included in the public record, and NetApp has provided a declaration and memorandum of points and authorities explaining the confidential nature of the documents sought to be sealed.

The Court further finds that the documents at issue contain confidential information and that the proposed sealing is narrowly tailored.

NetApp’s Motion to Seal is therefore GRANTED.

1. Nimble’s Motion to Compel Compliance with Statement that Documents would be Produced

As to RPDs 2, 5, 7, 8, 15, 18, 20, 21, 25, 30, 33, 34, 35 and 38 Nimble moves to compel compliance with NetApp’s agreement in its responses to these requests that documents would be produced pursuant to Code of Civ. Proc. §2031.320.  See Nimble Notice of Motion to Compel at 2:3-6 and Memorandum of Points and Authorities (“P&As”) at 4:19-21.

If a party who has responded to a request for production by stating that responsive documents will be produced later fails to provide documents in accordance with that party’s response, the demanding party may move for an order compelling compliance.  (Code Civ. Proc., § 2031.320, subd. (a).)  There is no deadline for bringing a motion to compel compliance and there is no meet and confer requirement for such a motion.  All that has to be shown is that the responding party failed to comply with an agreement to produce.  (Code Civ. Proc. § 2031.320, subd. (a); Standon Co., Inc. v. Super. Ct. (1990) 225 Cal.App.3d 898, 903.)

In response to the RPDs at issue here NetApp agreed, in its initial and supplemental responses, that it would produce any responsive documents that were not privileged or otherwise protected from disclosure, to the extent such documents existed and were within its possession, custody and control.  Nimble contends that it has failed to do so.

RPD Nos. 2, 7, 8, 15, 18, 21, 25 and 38

Regarding RPDs 2, 7, 8, 15, 18, 21, 25 and 38, NetApp argues that it has already complied and produced all such responsive documents.  (See Declaration of Karineh Khachatourian in support of NetApp’s Opposition (“KK Decl.”) at 16 and NetApp Exhibit O.[2])  Unsurprisingly in Reply Nimble contends that as to each of those RPDs the claimed production is, in its opinion, incomplete and/or insufficient.  Resolving this dispute is beyond the scope of a motion to compel compliance with an agreement to produce under Code of Civ. Proc. §2031.320.  NetApp’s assertion in its opposition that it has produced the identified documents does not demonstrate its compliance under Code of Civ. Proc. §2031.320 and it had been given more than sufficient time to perform as agreed.

Accordingly, as to RPD Nos. 2, 7, 8, 15, 18, 21, 25 and 38 the Motion is GRANTED AS FOLLOWS:  NetApp shall produce further verified code-compliant responses to RPD Nos.  2, 7, 8, 15, 18, 21, 25 and 38 identifying, specifically for each of these RPD, the responsive documents that NetApp contends are or have already been produced by Bates Number range and stating that such documents constitute all responsive documents, not privileged or otherwise protected from disclosure that are known to exist and are in NetApp’s possession, custody or control as of the date of the verified response.  Such further verified responses shall be produced by no later than 16 January 2015.

RPD Nos. 5, 20, 30, 33, 34 and 35

Regarding RPDs 5, 20, 30, 33, 34 and 35 NetApp fails to offer any material opposition.  It simply claims that it should not be compelled to comply with its agreement in the midst of a “rolling document production” and that it has behaved better than Nimble in terms of its document production.  Neither assertion is a reasonable basis for denying this motion.

Accordingly, as to RPD Nos. 5, 20, 30, 33, 34 and 35  the Motion is GRANTED AS FOLLOWS: NetApp shall produce further verified code-complaint responses to RPD Nos. 5, 20, 30, 33, 34 and 35 identifying, specific to each RPD, the responsive documents that are being produced with the responses or have already been produced by Bates Number range and stating that such documents constitute all responsive documents, not privileged or otherwise protected from disclosure that are known to exist and are in NetApp’s possession, custody or control as of the date of the verified response.  Such further verified responses, including responsive documents if any, shall be produced by no later than 16 January 2015.

1. Nimble’s Motion to Compel Further Responses to RPDs

As to RPDs 1, 3, 4, 17, 19, 26, 27, 28, 29 and 31 Nimble does not contend that NetApp has not provided responses pursuant to an agreement, instead it moves to compel NetApp to provide further, code-compliant responses pursuant to Code of Civ. Proc., §2031.310.  See Nimble Notice of Motion to Compel at 2:7-10 and P&As at 5:11-14.

A motion to compel further responses to requests for production of documents shall be accompanied by a meet and confer declaration “showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.”  (Code Civ. Proc., §§ 2016.040 and 2031.310, subd. (b)(2).) A reasonable and good faith attempt at informal resolution requires that the parties present the merits of their respective positions with candor, specificity, and support.  (Townsend v. Super. Ct. (1998) 61 Cal.App.4th 1431, 1435, 1439.) The level of effort at informal resolution which satisfies the “reasonable and good faith attempt” standard depends upon the circumstances of the case. (Obregon v. Super. Ct. (1998) 67 Cal.App.4th 424, 431.)  The Court has discretion to deny discovery absent efforts to meet and confer, but must consider whether a less drastic remedy is appropriate given the circumstances presented.  (See Townsend v. Superior Court, supra, 61 Cal.App.4th at p. 1439, Obregon v. Superior Court, supra, 67 Cal.App.4th at p. 434.)

NetApp contends that this motion should be denied for failure to meet and confer.

As noted above NetApp served its first supplemental response to RPDs on 9 October 2014.  Nimble addressed this first supplemental response in meet and confer correspondence, indicating that several amended responses were now satisfactory, but specifically stating that it believed the responses to RPDs 9-11, 13, 19, 22-24, 28-29, 32-32,38 and 39-42 remained inadequate and it asked NetApp to further supplement those responses.  See Nimble Exhibit 15 (emailed letter from Sebastian Kaplan dated 29 October 2014).  NetApp responded via email on 7 November 2014, stating in pertinent part “[w]e intend to amend our responses to Nimble RFPDs and will do so prior to your motion to compel deadline.”  See Nimble Exhibit 18.  Next Nimble sent an emailed letter dated 11 November 2014 that complained generally about the pace of NetApp’s discovery responses but did not address any specific RPD.  It included a proposal for “a hard deadline of November 21, 2014 for NetApp to supplement its responses.”  See Nimble Exhibit 19.

Nimble sent another letter three days later on 14 November 2014 complaining that it had not yet received a response to its proposal and stating its intention to have all motions to compel heard on 19 December 2014.  See Nimble Exhibit 20.

On 18 November 2014 counsel for NetApp responded, explaining that Nimble had previously been informed she would be out of the state and unavailable from 12-14 November (which NetApp Exhibit P confirms) and stating in pertinent part “NetApp expects to serve its supplemental responses to Nimble’s Form, Special Interrogatories and Requests for Production this week . . .”  Nimble Exhibit 21.  Nimble responded to this statement the next day, 19 November 2014,

“in further follow up to our requests for supplementation of NetApp’s Responses,” and stated in pertinent part “we do thank you for agreeing to a deadline of Friday, November 21, 2014 for NetApp’s supplemental responses to Nimble’s Form and Special Interrogatories and Request for Production. If we can receive substantive, code-complaint responses by Friday, we will certainly refrain from moving to compel.”

It is undisputed that NetApp’s Second Supplemental Response to RPDs (Nimble Exhibit 25) and First Supplemental Response to SIs (Nimble Exhibit 27) were served via overnight courier on 20 November 2014.  Despite this, and without any further meet and confer communications, Nimble filed its motion to compel further responses to RPDs and SIs on 25 November 2014.

Given Nimble’s failure to engage in any meet and confer discussion on amended responses that were provided by the very deadline Nimble set before it filed the present motion, the Court finds that Nimble has failed to show the required reasonable and good faith attempt at informal resolution.  While the Court has discretion to deny the motion in its entirety due to this failure (and considered doing so), instead the motion to compel further responses to RPDs is hereby CONTINUED to 16 January 2015.  The parties are directed to meet and confer regarding NetApp’s supplemental RPD responses in the interim and each side may file additional papers summarizing such meet and confer efforts by 9 January 2015.

1. Nimble’s Motion to Compel Further Responses to Special Interrogatories

Nimble seeks to compel NetApp to provide further responses to SI Nos. 1, 4, 5, 6, 7, 8, 9, 19, 21, 22, 23, 25, 26, 28 and 29 pursuant to Code Civ. Proc. § 2030.300.  See Nimble Notice of Motion to Compel at 2:11-13 and P&As at 11:5-8.

As with a motion to compel further responses to requests for production, a motion to compel further responses to interrogatories shall be accompanied by a meet and confer declaration “showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.”  (Code Civ. Proc., §§ 2016.040 and 2030.300, subd. (b).)  A reasonable and good faith attempt at informal resolution requires that the parties present the merits of their respective positions with candor, specificity, and support.  (Townsend v. Super. Ct. (1998) 61 Cal.App.4th 1431, 1435, 1439.) The level of effort at informal resolution which satisfies the “reasonable and good faith attempt” standard depends upon the circumstances of the case. (Obregon v. Super. Ct. (1998) 67 Cal.App.4th 424, 431.)  The Court has discretion to deny discovery absent efforts to meet and confer, but must consider whether a less drastic remedy is appropriate given the circumstances presented.  (See Townsend v. Superior Court, supra, 61 Cal.App.4th at p. 1439, Obregon v. Superior Court, supra, 67 Cal.App.4th at p. 434.)

NetApp contends that this motion should be denied for failure to meet and confer as well.

While the meet and confer communications between counsel regarding NetApp’s responses to SIs were slightly different the end result is the same.  On 29 October 2014 Nimble sent a letter to NetApp “to schedule a call or meeting to discuss” among other things “NetApp’s objections and limited responses to Nimble’s First Set of Special Interrogatories.”  See Nimble Exhibit 16.  NetApp responded on 6 November 2014, stating in pertinent part that “NetApp intends to supplement its responses to Special Interrogatories, Set One . . . to provide further substantive information.  . . .  We expect to be able to serve the supplemental responses within 3-4 weeks.”  NetApp also agreed to extend the motion to compel deadline to 5 December 2014.  See Nimble Exhibit 17.

In its emailed letter dated 11 November 2014 (Nimble Exhibit 19 discussed above) Nimble objected to the 3-4 week estimate and proposed the “hard deadline” of 21 November 2014 for the delivery of NetApp’s supplemental responses to SIs as well as RPDs.  NetApp’s First Supplemental Response to Special Interrogatories was served on Nimble via overnight courier on 20 November 2014.  See Nimble Exhibit 27.  Despite this service by Nimble’s deadline, and without any further meet and confer communication, Nimble filed its motion to compel on 25 November 2014.

Given the failure to meet and confer on the supplemental SI responses that Nimble knew were coming and were delivered by the deadline Nimble itself had set, the Court again finds that Nimble has failed to show the required reasonable and good faith attempt at informal resolution.   As with the motion regarding RPDs, while the Court considered denying the motion outright the Court will instead continue the motion to 16 January 2015.  The parties and directed to meet and confer on the supplemental SI responses and may file additional papers summarizing those meet and confer efforts by 9 January 2015.

Finally, as to both motions to compel further responses, as the Court is continuing these two motions to 16 January 2015 and ordering the parties to engage in meet and confer discussions on NetApp’s Second Supplemental Response to Nimble’s RPDs, Set One, and First Supplemental Response to SIs, Set One, NetApp’s objections to purportedly new material NetApp claims was raised for the first time in Nimble’s Reply are OVERRULED.  See Alliant Ins. Services, Inc. v. Gaddy (2008) 159 Cal.App. 4^th 1292, 1307-1308 (court has discretion to accept new evidence in reply papers as long as opposing party given opportunity to respond).  NetApp will have sufficient opportunity to discuss the purported new material with Nimble during the meaningful meet and confer discussions the Court expects the parties to have concluded by 16 January 2015.

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1. Conclusion and Order

NetApp’s motion to seal is GRANTED.

Nimble’s motion to compel compliance with agreement to produce documents is GRANTED as described above.  NetApp shall produce further verified responses to RPDs 2, 5, 7,8, 15, 18, 20, 21, 25, 30, 33, 34, 35 and 35 by no later than 16 January 2015 stating that all responsive documents are or have already been produced and identifying the documents (if any) responsive to each RPD by Bates numbers.

Nimble’s motion to compel further responses to RPDs 1, 3, 4, 17, 19, 26, 27, 28, 29 and 31 is CONTINUED to 16 January 2015 as described above.  The parties shall meet and confer on NetApp’s Second Supplemental Response to the RPDs, Set One, in the interim.

Nimble’s motion to compel further responses to SIs 1, 4, 5, 6, 7, 8, 9, 19, 21, 22, 23, 25, 26, 28 and 29is CONTINUED to 16 January 2015.  The parties shall meet and confer on NetApp’s First Supplement Response to SIs, Set One, in the interim.

________________­­­____________ DATED:

_________________________­­­________________________ HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara

[1] “Each exhibit must be separated by a hard 81/2 x 11 sheet with hard paper or plastic tabs extending below the bottom of the page, bearing the exhibit designation. An index to exhibits must be provided. Pages from a single deposition and associated exhibits must be designated as a single exhibit.”

[2] The Court is aware that NetApp’s opposition does not expressly identify RPD No. 8 as among those for which it asserts documents have already been produced as agreed.  As Ex. O plainly lists documents purportedly produced in response to RPD No. 8, for purposes of this motion it is deemed to be among those RPDs for which NetApp asserts it has already complied with its agreement to produce responsive documents.