Integral Development Corp v. Tolat

Filing 65

ORDER re 55 56 Joint Discovery Letter Briefs. Signed by Magistrate Judge Laurel Beeler on 4/22/2013. (lblc2, COURT STAFF) (Filed on 4/22/2013)

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UNITED STATES DISTRICT COURT

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Northern District of California

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San Francisco Division
INTEGRAL DEVELOPMENT
CORPORATION,

No. C 12-06575 JSW (LB)

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For the Northern District of California

UNITED STATES DISTRICT COURT

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ORDER RE JOINT DISCOVERY
LETTER BRIEFS (ECF NOS. 55 AND
56)

Plaintiff,
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v.
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VIRAL TOLAT,
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Defendant.
_____________________________________/

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INTRODUCTION
Plaintiff Integral Development Corporation has sued Defendant Viral Tolat, alleging that he has

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violated his employment contract, breached his fiduciary duties, and misappropriated its trade

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secrets. The parties have two discovery disputes: (I) whether Mr. Tolat improperly failed to respond

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to questions posed during his deposition; and (II) regarding the production and/or return of certain

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electronic information. See Joint Letters, ECF Nos. 55 and 56. Certain portions are filed under seal

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and give context to the court’s orders below, but because the context is sensitive, the court does not

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refer to it.

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The court held a telephonic hearing on April 22, 2013 and rules as follows.
ANALYSIS

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I. MR. TOLAT’S DEPOSITION
As described in the under seal parts of the joint letter, with about 30 minutes left in his

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deposition, Integral’s counsel asked Mr. Tolat certain questions, and Mr. Tolat’s attorney asked for

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context and an offer of relevance. Then Integral’s counsel followed with questions relating to

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network issues, and Mr. Tolat responded to the allegations. The transcript shows a heated debate

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between the lawyers and an attempt to call the court. (Apparently the parties called the courtroom

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deputy and not chambers.) Then, counsel for Integral represents that – off the record and with about

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20 minutes left in the deposition – he asked to finish questioning, and Mr. Tolat’s lawyer said that he

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wanted a court order first. (This last point was raised at the hearing, and Mr. Tolat’s lawyer had a

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different take on what happened.)

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Mr. Tolat argues that the questions were in bad faith and violated Rule 37(d)(3)(A), which

argues that the questions are relevant because his job performance is at issue given his alleged

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allows a deposition to be limited or terminated if the questions are in bad faith or to harass. Integral

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breach of his contractual and fiduciary duties.

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On the one hand, relevance objections are improper (and reserved), and Judge White’s standing

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order for civil practice says that explicitly. On the other hand, the questions are of marginal

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relevance and – at least on this record – would not come in as evidence maybe on a straight Rule

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402 basis and certainly an a Rule 403 analysis. There was a certain “gotcha” quality to the

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questions, and they came right at the end. For all sorts of reasons, sentiments may be inflamed in an

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employment case such as this where the parties have a long-standing relationship, and one party

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(here, Mr. Tolat) is ending his relationship with Integral, who may not have wanted the relationship

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to end. Also, while the parties’ expedited discovery is a good process to get toward settlement (and

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the record reflects that the parties had intended private mediation by March 14, 2013, and they

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confirmed at the hearing that they are pursuing it and a court-sponsored settlement conference),

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probably this kind of questioning is not something that facilitates settlement. Whatever context the

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factual record provides is already there.

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In any event, had the parties been able to reach the court during Mr. Tolat’s deposition, the court

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likely would have allowed the final 20 minutes to proceed and would have admonished counsel to be

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less heated and more fact-oriented. Integral’s requested relief of a full-day of questioning is not

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proportionate to the significance of the questions, as evidenced by Integral’s raising them at the end

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of the deposition. Also, there were about 20 minutes left at the end, and the factual record already

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exists in a way not likely to be illuminated by further questioning. Still, this ruling is without

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prejudice to Integral’s raising the issue later in the context of a fact proffer that demonstrates a real

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need for more information.

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II. ELECTRONIC INFORMATION

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Integral asserts that Mr. Tolat returned his office Blackberry without the memory card, and it

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asserts that he synchronized it with his home computer. Integral also has information that he took

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his email folders with him and uploaded company files into a personal Dropbox account. Integral

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wants Mr. Tolat to (1) produce the hard drive for forensic analysis (to be returned as soon as is

with information belonging to Integral, (4) return confidential information uploaded to Dropbox, and

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reasonably possible), (2) return the Blackberry memory card, (3) produce for analysis any media

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(5) return any source code he took from Integral.

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As to the Blackberry memory card, for the reasons stated on the record, the court orders Mr.

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Tolat to return within 7 days any memory card he has. If he does not have the card, he should

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provide a declaration saying that he does not have it. If he had one and lost it, he should explain that

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in the declaration.

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As to the computer hard drive, computer media, source code, and Dropbox, the court orders the

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following. Mr. Tolat is to return all confidential information to Integral, including any source code1

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that he took. He may not possess it on any media, including his computer or any storage devices or

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Dropbox. In the letter brief, he offered to have an independent expert confirm that he deleted

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information from his home computer and Dropbox. At the hearing, he offered to have Integral

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review his Dropbox, and counsel will meet and confer on a procedure. If they cannot agree, they

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will use the independent expert that Mr. Tolat agreed to for the hard drive. As to the hard drive, the

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parties will agree to a mutually-agreed to expert to review Mr. Tolat’s hard drive, return any

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personal information to him on a new storage device (without disclosing to Integral what it is), and

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perform a forensic analysis to see if any information was transferred from that computer (and when)

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Mr. Tolat says that he did not take source code. If that is the case, then there is no issue,
but the court orders its return regardless for the reasons stated on the record.
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to other storage devices.

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As to the selection of the expert, the parties should confer. Mr. Tolat has an incentive to be sure

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that Integral agrees with his choice. Integral should suggest someone. The court will decide if the

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parties cannot.

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As to what happens to the hard drive, Mr. Tolat suggested that his hard drive be destroyed after

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that. That may be appropriate after the litigation concludes or after the forensic analysis is

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completed, but it is not now.

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As to what is “personal information,” the court expects that there is confidential information,

The parties will meet and confer as to the categories and provide the independent expert with the

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protocol for the search. The court’s view is that Mr. Tolat ought to be able to identify what is

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truly personal information, and “personal” information that Integral may say really is confidential.

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personal because he knows what is on his computer. His privacy interests are protected because in

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the end, the hard drive will be returned. This is his opportunity to segregate out what is truly

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personal and give Integral confidence that it has all of its information back. As Integral’s counsel

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pointed out, this matters to the client for settlement.

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CONCLUSION

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This disposes of ECF Nos. 55 and 56.

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IT IS SO ORDERED.

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Dated: April 22, 2013

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_______________________________
LAUREL BEELER
United States Magistrate Judge

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