Storz Management Company et al v. Carey et al
Filing
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ORDER signed by District Judge Troy L. Nunley on 2/8/18 DENYING 16 Ex Parte Application for expedited discovery. (Kaminski, H)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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STORZ MANAGEMENT COMPANY, a
California Corporation, and STORZ
REALTY, INC.,
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Plaintiffs,
v.
No. 2:18-cv-00068-TLN-DB
ORDER DENYING PLAINTIFFS’ EX
PARTE APPLICATION FOR EXPEDITED
DISCOVERY
ANDREW CAREY, an individual, and
MARK WEINER, an individual,
Defendants.
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This case involves alleged trade secret misappropriation and breach of duties by former
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officers in Storz Management Company. Plaintiffs Storz Management Company and Storz
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Realty, Inc.’s (collectively “Plaintiffs”) move ex parte for expedited discovery. (ECF No 16.)
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Plaintiffs served Defendants Andrew Carey and Mark Weiner (jointly “Defendants”) on January
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12, 2018. (ECF Nos. 5 & 6.) However, Defendants have yet to make an appearance or file an
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answer in the given matter.
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Plaintiffs seek expedited discovery in support of their pending motion for preliminary
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injunction filed on January 30, 2018. (ECF No. 8.) Plaintiffs seek to conduct expedited
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discovery as follows: collect information regarding the identity and location of Storz property in
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Defendants’ possession, Defendants’ communications with Plaintiffs’ customers and employees,
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documents relating to Defendants’ communications with mobile home parks, ledgers for
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Defendants’ company, an accounting of the companies’ property, cellphone records of
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Defendants in connection with their businesses, all records to support a full and complete
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investigation into Defendants’ companies’ activities, images of the computers used by Defendants
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and the company, identification of all persons whom Defendants have contacted regarding their
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company, personal tax returns for Defendants appropriately redacted, Company tax returns, and
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immediate depositions of Defendants and two former employees of Storz. (ECF No. 16-1 at 4–
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5.)
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A party may not seek discovery from any source before the Rule 26(f) conference unless
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otherwise authorized by the rules, by stipulation, or by court order. Fed. R. Civ. P. 26(d)(1). In
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determining whether to grant expedited discovery, courts in the Ninth Circuit apply the “good
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cause” standard and find good cause “where the need for expedited discovery, in consideration of
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the administration of justice, outweighs the prejudice to the responding party.” Semitool, Inc. v.
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Tokyo Electron America, Inc., 208 F.R.D 273, 276 (N.D. Cal. 2002). Courts consider the
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following factors when determining whether good cause justifies expedited discovery: “(1)
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whether a preliminary injunction is pending; (2) the breadth of the discovery requests; (3) the
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purpose for requesting the expedited discovery; (4) the burden on the defendants to comply with
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the requests; and (5) how far in advance of the typical discovery process the request was made.”
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Apple Inc. v. Samsung Elec. Co., Ltd., 2011 WL 1938154, at *1 (N.D. Cal. May 18, 2011)
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(quoting Am. Legal Net, Inc. v. Davis, 673 F. Supp. 2d 1063, 1067 (C.D. Cal. 2009)).
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Good cause for expedited discovery has been found in cases involving claims of unfair
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competition or in cases where the plaintiff seeks a preliminary injunction. Palermo v.
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Underground Solutions, Inc., 2012 WL 2106228, at *2 (S.D. Cal. June 11, 2012). In cases where
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a preliminary injunction is pending, courts often permit expedited discovery designed to obtain
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information required for the preliminary injunction. Id. The discovery request must be narrowly
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tailored to obtain information relevant to a preliminary injunction determination. Dimension
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Data N. Am. V. NetStar–1, Inc., 226 F.R.D. 528, 532 (E.D. N.C. 2005). Expedited discovery may
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be denied where the expedited discovery goes to the merits of the plaintiff’s claim. Am. Legal
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Net, Inc., 673 F. Supp. 2d at 1069.
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Plaintiffs assert good cause exists to permit expedited discovery. (ECF No. 16-1 at 6–7.)
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Plaintiffs contend the pending motion for preliminary injunction and the fact that the discovery is
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directed at issues raised in the preliminary injunction motion warrant granting expedited
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discovery. (ECF No. 16-1 at 6.) Plaintiffs further contend Defendants have already destroyed
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evidence by removing data from their Storz computers prior to leaving. (ECF No. 16-1 at 6.)
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Plaintiffs argue expedited discovery is crucial to prevent the further destruction of evidence and
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to provide more support for their pending motion for preliminary injunction. (ECF No. 16-1 at
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6.)
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Plaintiffs’ application mostly asserts a need for discovery to support its pending motion
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for preliminary injunction. However, Plaintiffs motion for preliminary injunction belies that
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contention. Plaintiffs mention a need for expedited discovery in only one instance. (ECF No. 8-1
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at 16.) Plaintiffs state that Defendants removed from their offices key missing files which
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support their cause of action under the Defend Trade Secrets Act. (ECF No. 8-1 at 16.) Plaintiffs
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then state in a footnote that expedited discovery including the deposition of Robert Domingo, the
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person allegedly enlisted to remove the information from Storz’s offices after Defendants’
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termination, will provide crucial information relating to the key missing files. (ECF No. 8-1 at 16
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n.6.) This single instance is contradicted by the continuous remarks throughout the ex parte
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application that “Defendants’ destruction of evidence makes knowing more impossible.” (See,
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e.g., ECF No. 8-1 at 16.) Even if the Court were inclined to find a single instance of need
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sufficient to demonstrate good cause, the discovery sought is overly broad for this purpose.
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Plaintiffs seek accounting documents, tax documents, contact information, and computer pictures,
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which would not determine what missing files Defendants actually possess. (ECF No. 16-a at 4–
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5.)
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Furthermore, Plaintiffs offer contradictions in their two moving papers. In their motion
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for preliminary injunction, Plaintiffs state “Storz has established [Defendants] are liable, that
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Storz has suffered indefinable losses as a result of these thefts and data destruction, and that Storz
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is likely to prevail on the merits of its CFAA claims, entitling it to full return of all removed files
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and documents, and all of the expedited discovery it requests.” (ECF No. 8-1 at 18.) However, in
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their ex parte application, Plaintiffs assert expedited discovery is necessary to support their
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motion for preliminary injunction and prevent the destruction of evidence. It is clear from
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Plaintiffs’ statement in their motion for preliminary injunction that they do not believe the
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evidence is necessary to support their preliminary injunction. Rather, Plaintiffs’ statement
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suggests Plaintiffs feel they are entitled to expedited discovery because they have shown a
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likelihood of success on the merits of their Computer Fraud and Abuse claim. This is not the
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standard. Based on the above, the Court finds Plaintiffs’ request goes to the merits of the
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complaint rather than in support of their motion for preliminary injunction and thus must be
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denied.
For the reasons set forth above, the Court hereby DENIES Plaintiffs’ ex parte application
for expedited discovery.
IT IS SO ORDERED.
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Dated: 2/8/2018
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Troy L. Nunley
United States District Judge
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