Patrick S. Ryan v. NextG Networks Inc.		CASE NO. 112CV218713
DATE: 25 April 2014	TIME: 9:00	LINE NUMBER: 35

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 24 April 2014.  Please specify the issue to be contested when calling the Court and counsel.

On 25 April 2014, the motion of plaintiff Patrick Ryan (“Plaintiff” or “Mr. Ryan”) to quash Defendant’s Deposition Subpoena served upon Plaintiff’s current employer, Google, Inc. (“Google”)and for monetary sanctions was argued and submitted.  Defendant filed a formal opposition to the motion also requesting monetary sanctions.

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

I. Background

Defendant NextG Networks Inc. (“Defendant” or “NextG”) served a subpoena upon Plaintiff’s current employer Google, requiring Google’s Person Most Knowledgeable (“PMK”) to testify on 27 April 2014, regarding the employment negotiations that led to Plaintiff’s hiring at Google; Plaintiff’s employment application to Google; Plaintiff’s compensation package at Google; Google’s offer of any stock options to Plaintiff; and the terms and conditions of such stock option grants by Google.

Plaintiff filed this suit against NextG seeking recovery of more than $325,000.00 for stock options he alleges NextG owes him.  Plaintiff claims a number of causes of action including fraud and breach of contract.

On 27 March 2014, Defendant served the Google Subpoena upon Mr. Ryan.  On 2 April 2014, Defendant served Google.

The parties exchanged meet and confer letters attempting to resolve the matter informally, but were unable to come to an agreement.

II.  Discussion

Plaintiff makes this motion for an order to quash the subpoena of Google’s PMK under Code of Civil Procedure § 1987.1(a).  The subpoena seeks information regarding the compensation negotiated between Plaintiff and Google, just prior to Plaintiff’s resignation from employment at NextG.

A.  Legal Standard With Regards to Privacy Interests and Right to Discovery.

Article I, Section 1 of the California Constitution, protects certain inalienable rights, among which are the privacy interests of an individual.  California case law recognizes a person’s privacy interests in their employment records.  San Diego Trolley, Inc. v. Superior Court, (2001) 87 Cal.App.4th 1083, 1097.

NextG asserts as part of its defense that Plaintiff’s rights to the stock options did not vest, in addition to defenses relating to principles of equity.  NextG claims that the subpoena of Google’s PMK is necessary for Defendant to properly defend this case.

Defendant argues that the deposition of Google’s PMK is necessary to determine whether, Google compensated Plaintiff for the stock options, which Plaintiff is now seeking against Defendant.  One of the major tenets of contract law is making parties whole, as if the contract had been completed.  A party is not entitled to relief for more than what would have been paid had there been no breach of contract.[2]  Defendant also argues that the negotiations between Google and Mr. Ryan are relevant because the information may prove or disprove, Mr. Ryan’s knowledge of NextG’s vesting provisions relating to his stock options.

Information is relevant if it “might reasonably lead to admissible evidence” and “might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.”  Lipton v. Superior Court, (1996) 48 Cal.App.4th 1599, 1611.

Here, the testimony of Google’s PMK is relevant to NextG’s claims of defense.  However, this does not necessarily entitle Defendant to the deposition of Google’s PMK.

Where the constitutionally protected privacy rights of the Plaintiff are involved the Court must proceed with a careful balancing test.  An employee’s personnel records and personal financial information may be abridged where there is a compelling interest for the disclosure, including “facilitating the ascertainment of truth in connection with legal proceedings.”  Moskowitz v. Superior Court, (1982) 137 Cal.App.3d 313, 316.  When a party files a lawsuit, the filing of the suit may implicitly bring about a partial waiver of one’s constitutional right of privacy.  The scope of this waiver must be narrowly rather than expansively construed.  Mendez v. Superior Court, (1988) 206 Cal.App. 3d 557, 566.

Here the Court is obligated to carefully balance the rights of civil litigants on the one hand with the privacy rights of Mr. Ryan on the other.  Valley Bank of Nevada v. Superior Court, (1975) 15 Cal. 3d 652, 657.

B.  Protections of Mr. Ryan’s Privacy Interests.

Defendant has narrowed the scope of the subpoena requests to three narrow subjects: (1) communications between Google and Mr. Ryan relating to Mr. Ryan’s pre-hiring negotiations; (2) any pre-hiring proposals or initial terms of employment or employment offers from Google, including drafts thereof; and (3) the terms of any stock option agreement Mr. Ryan entered into with Google.  In addition, there is an enforceable protective order in place between the parties.

Since Defendant has limited the scope of the deposition of Google’s PMK and there is an existing protective order, Plaintiff’s privacy interests are adequately protected.

Therefore Plaintiff’s motion for an order quashing Defendant’s deposition subpoena is DENIED.

C.  Monetary Sanctions.

Both parties request monetary sanctions in this case.

Pursuant to Code of Civil Procedure § 1987.2(a), “the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court find 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.”

The Court finds both parties have acted with substantial justification, therefore all requests for sanctions are DENIED.[3]

III.  Conclusion and Order.

Plaintiff’s motion for an order quashing Defendant’s subpoena of Google’s PMK is DENIED.

Defendant will re-notice Google’s PMK and Plaintiff for a deposition.  The deposition will be limited in scope to the three narrow subjects specified in the original notice for deposition.  The deposition testimony of Google’s PMK will be subject to a protective order designating the testimony as “CONFIDENTIAL.”

All requests for monetary sanctions are DENIED.