BladeRoom Group Limited et al v. Facebook, Inc.
Filing
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ORDER by Magistrate Judge Howard R. Lloyd re 124 Discovery Dispute Joint Report No. 1. (hrllc2, COURT STAFF) (Filed on 2/28/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
United States District Court
Northern District of California
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BLADEROOM GROUP LIMITED, et al.,
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Case No.5:15-cv-01370-EJD (HRL)
Plaintiffs,
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ORDER RE DISCOVERY DISPUTE
JOINT REPORT NO. 1
v.
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FACEBOOK, INC., et al.,
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Re: Dkt. No. 124
Defendants.
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Plaintiffs sue for alleged misuse of claimed trade secrets concerning designs and
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methodology for building data centers. Discovery Dispute Joint Report (DDJR) No. 1 presents a
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dispute as between plaintiffs, on the one hand, and defendant Facebook, Inc. (Facebook) on the
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other. At issue: whether Facebook’s retained testifying expert, KC Mares, may access and use
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material that plaintiffs designated “Confidential” or “Highly Confidential-Attorney’s Eyes Only”
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under the stipulated protective order.1 (Dkt. 54). The matter is deemed suitable for determination
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without oral argument. Civ. L.R. 7-1(b). Upon consideration of the parties’ respective
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arguments,2 this court rules as follows:
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Plaintiffs point out that they have agreed that Facebook’s seven other retained experts may
access their confidential information. Facebook says that those seven others are employees of a
litigation analytics firm who will not testify.
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This court has not found it necessary to consider plaintiffs’ supplemental exhibits from a press
release and from a website. Defendant’s request for leave to file a supplemental response to those
In his curriculum vitae, Mares describes himself as the “[e]xecutive leader of global data
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center strategy, development, design, procurement and operations.” (Dkt. 124-1 at 6). He further
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states that he has “led the design and construction of $5-10 billion of data centers and [has]
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negotiated and managed data center and network services with nearly every major provider.”
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(Id.). Mares has a consulting business, MegaWatt Consulting, Inc., in which he advises clients on
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data center design, operation, site selection, development, and energy efficiency. (Id.). Among
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the services and experience offered to clients is: “Led the development of various software,
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renewable energy and technology products and a reviewer of many new technologies used within
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the data center space . . ..” and “Lead design teams for many complex data center projects,
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creating innovations and PUEs of less than 1.1.” (Id.).3
United States District Court
Northern District of California
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Plaintiffs previously considered allowing Mares to access their claimed confidential
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information, provided that he signed a declaration agreeing to refrain from certain activities.
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Among other things, plaintiffs’ proposed declaration required Mares to agree to the following
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statements:
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“I have not designed data centers and have no current plans to design data centers”;
and
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“I will not . . . provide designs for data centers during the pendency of the
Litigation and for one year following the termination of the Litigation.”
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“I will not . . . .consult on the design or build of an air handling system during the
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pendency of the Litigation and for one year following the termination of the
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Litigation.”
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(Dkt. 124, DDJR 1 at 7; Dkt. 125-2 at 3). Mares had no problem with other aspects of plaintiffs’
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proposed declaration (see Dkt. 125-1); and, Facebook contends that any concerns about plaintiffs’
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confidential information are sufficiently addressed by portions of the declaration that Mares
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offered to sign, including that for the duration of this litigation (and for one year after its
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exhibits is denied.
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Although not explained in the present DDJR, this court’s understanding is that “PUE” essentially
is a measure of how efficiently a data center uses energy.
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termination), he would recuse himself from decisions involving subcontractor selection/evaluation
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if plaintiffs were among the bidders; would not provide engineering or architectural services; and
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would not design or build an air handling system. (Dkt. 125-1 at 3). Defendant argues that this
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proffered declaration, coupled with the terms of the stipulated protective order, are sufficient to
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address plaintiffs’ concerns. In plaintiffs’ view, defendant’s proffer is insufficient without the
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additional assurances re data center design. The deal-breaker was that Mares could not sign off on
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the above-quoted representations. Facebook says that is because Mares is asked to consult on data
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center design from time to time.
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Without their desired declaration, plaintiffs oppose Mares’ access to their confidential
information, arguing that his ongoing consulting work in data center design presents an
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United States District Court
Northern District of California
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unacceptable risk of inadvertent misuse. They fear that Mares, once having had access to their
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confidential information, will not be able to compartmentalize their claimed trade secrets from
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other information he obtains and uses in the course of his work. Facebook contends that plaintiffs’
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concerns are unfounded.
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To resolve this dispute, the court balances Facebook’s interest in selecting the experts most
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beneficial to its case with plaintiffs’ interest in protecting their claimed trade secrets from
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disclosure to competitors. Symantec Crop. v. Acronis Corp., No. 11-5310 EMC (JSC), 2012 WL
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3582974 at *3 (N.D. Cal., Aug. 20, 2012). As the parties opposing disclosure, plaintiffs bear the
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burden of demonstrating that the risk of harm that disclosure to Mares would entail (under any
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proposed safeguards) outweighs Facebook’s need for Mares’ access to such materials.
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The primary point of contention is whether Mares is a competitor of plaintiffs. Under the
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stipulated protective order, an expert cannot be “a past or current employee of a Party or of a
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Party’s competitor” or “anticipated to become an employee of a Party or of a Party’s competitor.”
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(Dkt. 54 ¶ 2.7). Facebook contends that Mares is not a “competitor” in any sense of the word
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because, unlike plaintiffs, Mares does not himself design or build data centers. Rather, he advises
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clients about them; and, simply consulting on aspects of data center design, says Facebook, does
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not make Mares a competitor. Here, defendant cites Rheumatology Diagnostics Lab., Inc. v.
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Aetna, Inc., No. 12-cv-05847-WHO, 2015 WL 1744330 at *11 (N.D. Cal., Apr. 15, 2015) in
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which the court concluded that an expert was not defendant’s competitor where his services were
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similar, but “not the same thing” as defendant’s (i.e., he helped physicians install and operate
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clinical laboratories, whereas defendant provided physicians with clinical laboratory services).
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Mares is not a “competitor” of plaintiffs in any traditional or conventional sense. Even so,
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this court finds that there is a potential risk of inadvertent disclosure of plaintiffs’ confidential
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information because the record suggests that a purpose of Mares’ consultancy is to advise, inform,
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and guide decisions re data center design. See, e.g., Isis Pharmaceuticals, Inc. v. Santaris Pharma
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A/S Corp., No. 11cv2214-GPC (KSC), 2013 WL 3367575 at *6 (S.D. Cal., July 5, 2013) (finding
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a risk of inadvertent disclosure where the essence of the proposed expert’s consulting practice was
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United States District Court
Northern District of California
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“to impact, shape, and inform decisions” re the subject technology).
Further, plaintiffs point out that Mares actively consults in the very field at issue. Courts
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have concluded that a “proposed expert’s ongoing work in the field created a substantial risk of
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misuse such that he should only be allowed access to the confidential information if he possessed
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‘unique expertise.” GPNE Corp. v. Apple, Inc., No. 5:12-cv-02885-LHK (PSG), 2014 WL
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1027948 at *1-2 (N.D. Cal., Mar. 13, 2014) (denying access to confidential materials by an expert
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who actively consulted with plaintiff’s competitors and where there was no showing that he had
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unique qualifications that would make him better suited than any other expert); Symantec Corp.,
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2012 WL 3582974 at *2-3 (denying access to confidential materials where the expert offered
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consulting and analysis in the very field at issue and there was no showing that the expert had
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unique knowledge that could not be found in another expert). Cf. Advanced Semiconductor
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Materials Am. Inc. v. Applied Materials Inc., No. 95-20169, 1996 WL 908654, at *3 (N.D. Cal.
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Oct. 28, 1996) (allowing access to confidential materials by an expert who had not consulted on
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the technology at issue for four years).
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This court wonders whether anyone Facebook might want to use would be able to sign off
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on the representations plaintiffs desire, namely that the proposed expert has not designed data
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centers and has no plans to do so. Nevertheless, the court concludes that, on balance, the risk of
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inadvertent disclosure is not outweighed by prejudice to Facebook. Here, as in GPNE and
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Symantec Corp., defendant has not identified any unique qualifications or knowledge Mares has
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that make him better suited to serve than any other expert. Cf. Isis Pharmaceuticals, Inc., 2013
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WL 3367575 at *7-8 (allowing disclosure of confidential information to a proposed expert where
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the field in question was highly specialized and the pool of available experts was small).
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Based on the foregoing, plaintiffs’ request for an order precluding Mares’ access to their
confidential information is granted.
SO ORDERED.
Dated: February 28, 2017
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HOWARD R. LLOYD
United States Magistrate Judge
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United States District Court
Northern District of California
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5:15-cv-01370-EJD Notice has been electronically mailed to:
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Anthony David Giles
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Elizabeth Lee Stameshkin
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Erik Christopher Olson
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Eugene Y. Mar
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anthony@anthonygiles.com
lstameshkin@cooley.com
eolson@fbm.com, calendar@fbm.com, shunt@fbm.com
emar@fbm.com, calendar@fbm.com, mclaros@fbm.com
Heidi Lyn Keefe
hkeefe@cooley.com, jmcintosh@cooley.com
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James Alexander Reese
areese@fbm.com
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Jeffrey M. Fisher jfisher@fbm.com, calendar@fbm.com, renterig@fbm.com,
wpemail@fbm.com
Julia Frederika Kropp
jkropp@fbm.com, bwestburg@fbm.com, calendar@fbm.com
United States District Court
Northern District of California
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Kristine Anne Forderer
Mark Frederick Lambert
kforderer@cooley.com, rcahill@cooley.com, swarren@cooley.com
mlambert@cooley.com, lalmanza@cooley.com
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Mark R. Weinstein
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Matthew David Caplan
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Melinda Mae Morton mindy.morton@procopio.com, calendaring@procopio.com,
gail.poulos@procopio.com
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mweinstein@cooley.com, patricia.russell@cooley.com
mcaplan@cooley.com, smartinez@cooley.com
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Michael Graham Rhodes
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Robert H. Sloss robert.sloss@procopio.com, calendaring@procopio.com,
gail.poulos@procopio.com
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Robert Thomas Cahill , Jr
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Stephanie Powers Skaff
rhodesmg@cooley.com, lopezre@cooley.com, moyespe@cooley.com
rcahill@cooley.com
sskaff@fbm.com, bwestburg@fbm.com, calendar@fbm.com
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