Robert Half International Inc. v Ainsworth

Filing 61

ORDER: The motion for leave to file amended counterclaims (Dkt #s 33 , 37 ) is granted. Defendants shall file the First Amended Counterclaims within ten (10) days from the date of this Order. The motions to file documents under seal (Dkt #s 31 , [ 41]) are granted. The motion for leave to file a first amended complaint (Dkt # 43 ) is granted. Plaintiff shall file the First Amended Complaint within ten (10) days from the date of this Order. The motion to amend scheduling order (Dkt # 43 ) is referred to Magistrate Judge David H. Bartick. Signed by Judge William Q. Hayes on 7/15/2015. (mdc)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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ROBERT HALF INTERNATIONAL,
INC., a Delaware corporation,
Plaintiff,

CASE NO. 14-CV-2481-WQH (DHB)
ORDER

vs.
ERIC SHANE AINSWORTH, an
individual; LISA LYNN ALDAV A,
an individual' SERENA MAl
GREENWo5D-.'.~r individual;
RUBEN D . HEKNANDEZ, an
individual' DEANA H.
SCHWEITZE~ an individual;
CATHERINE ~ . SHERMAN, an
individual; and DOES 1 through 20,

Defendants.

18
1911 HAYES, Judge:
20 II

The matters before the Court are: (1) the motion for leave to file amended

21 II counterclaims (ECF Nos. 33,37) filed by Defendants; (2) the motion to file documents
22 II under seal (ECF No. 31) filed by Defendants; (3) the motion to file documents under
23 II seal (ECF No. 41) filed by Plaintiff; and (4) the motion for leave to file first amended
24

complaint and to amend scheduling order (ECF No. 43) filed by Plaintiff.

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I. Background

2611

On September 23, 2014, Plaintiff Robert Half International Inc. ("RBI")

2711 commenced this action by filing a Complaint in San Diego County Superior Court.
28 II (ECF No. 1-1). The Complaint alleges that Defendants, Plaintiffs fonner employees,
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14-C V-2481 -WQH (DHB)

1 II breached their respective employment agreements and engaged in unfair competition
2 II after terminating employment with Plaintiff and going to work

competitors. The

3 /I Complaint alleges that Defendants violated Paragraph Thirteen of their respective
411 employment agreements by "touting [their] RBI experience and background for [their]
511 new employer[s'] benefit."J
6 II claims
7

No. 1-1 at 16,21,25,27). The Complaint

breach of contract, breach of fiduciary duty, breach of the implied covenant

good

with DrOSDectlVe economiC

and fair dealing, tortious

8 advantage, violation

Lanham Act, violation ofCalifornia Business & Professions

9 II Code section 17200, and common law unfair competition.
10

On October 17, 2014, Defendants

Ainsworth, Lisa Aldava, Serena

11 II Greenwood, Ruben Hernandez, Jr., Deana Schweitzer, and Catherine Sherman removed
1211 the action to this Court on the basis offederal question jurisdiction. (ECF No.1). On
13 II October 23,2014, Defendants filed a motion to dismiss the Complaint.

No.6).

14 II On December 17, 2014, the Court issued an Order, granting in part and denying in part
15 II the motion to dismiss. (ECF No.1 0). The Court dismissed Plaintiff's second, eighth,
16 II ninth, twelfth, thirteenth, fourteenth, fifteenth, seventeenth, and eighteenth claims
17 1\

of contract and breaches of the implied covenant

18 II dealing "only to the extent these claims seek to
19 II employment agreements." ld. at 23.

good faith and fair

Paragraph Thirteen of the

Court found that

Complaint

to

20 II allege sufficient facts 'plausibly suggestive of a claim entitling the plaintiff to relief'
21 II

breach of Paragraph 13, Le., facts showing that Paragraph 13 is enforceable." ld.

22\\ at 10 (citation omitted). The Court dismissed Plaintiff's sixth and tenth claims for
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Paragraph Thirteen of

employment

provides:

After termination of Employee's employment with Employer, Employee
shall not indicate on any' statlonary, business card, advertising, solicitatlOn
or other business materials that Employee is or was formerly an employee
of Employer, any of its divisions, or any of the RBI Companies except in
the bona tide submission ofresumes and the filling out of applications in
the course of seeking employment.
(ECF No. 1-1

39).
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14-CV-2481-WQH (DHB)

III tortious interference with prospective economic advantage as displaced by the
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California Uniform

3
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Secrets

On December 30, 2014, Defendants filed an Answer
Counterclaims for Breach

No. 12) and

Contract and Unfair Competition

No. 13). On

5 January 23, 2015, Plaintiff filed a Motion to Dismiss Counterclaims for Breach
6 Contract and Unfair Competition or, in
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Alternative, for a More Definite Statement.

No. 19). On March 16,2015, the Court issued an Order granting the motion to

8 II dismiss. (ECF No. 28). The Court found that Defendants had faBed to allege sufficient
9 facts to state plausible breach of contract and unfair competition claims. The Court

10 granted Defendants thirty days to file a motion for leave to file amended counterclaims.
11

On February 11, 201

States Magistrate

12 Scheduling Order, giving the parties until May 13,

David Bartick issued a

15, to file "[a]ny motion to join

13 other parties, to amend the pleadings, or to file additional pleadings .... "

No.

14 at 1).
15

On April 15 and 16,2015, Defendants filed

motion forleave

file amended

16 counterclaims, accompanied by the motion to file documents under seal. (ECF Nos.
17 33,34,37). On May 1 2015, Plaintiff filed an opposition. (ECF No. 41). On May
18

13,201

Plaintiff filed the motion to file documents under seal. (ECF No. 41). On

19 May 19,2015, Defendants filed a reply. (ECF No. 45).
20

On May 13, 2015, Plaintiff filed the motion for leave to file a first amended

2111 complaint and to amend scheduling order. (ECFNo.

). On June 1,201

Defendants

22 filed a response. (ECF No. 50). On June 8, 2015, Plaintiff filed a reply. (ECF No. 53).
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H. Discussion
A. Defendants' Motion for Leave to File Amended Counterclaims
(ECF Nos. 33, 37)
Defendants request leave to file amended counterclaims. Defendants

27 II Plaintiff aQIees that amendment is appropriate, based on
28 II motion to

that

contentions in its

Defendants' counterclaims. Defendants contend that their proposed
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14-CV-2481-WQH (DHB)

1 amended counterclaims include more factual allegations. Plaintiff contends that
2

would be

because Defendants have failed to establish standing

3 pursuant to California Business and Professions Code section 17200.
411

Federal Rule of Civil Procedure IS mandates that

to amend "be

S II given when justice so requires." Fed. R. Civ. P. IS(a). "This policy

be applied

6 II with extreme liberality." Eminence Capital, LLC v. Aspeon, Inc., 316

1048, 10S1

7 (9th

2003) (quotation omitted).

8 a

considers whether there

determining whether to allow an amendment,

"undue delay," "bad faith," "undue prejudice to the

9 1/ opposing party," or "futility of amendment." F oman v. Davis, 371 U.S. 178. 182
10 II (1962). "Not
11 II ofprejudice
12 II 316 F.3d
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IS

merit equal weight.. .. [1]t is the consideration

the opposing party that carries the

weight." Eminence Capital,

1OS2 (citation omitted). "The party opposing amendment

the burden

showing prejudice." DCDPrograms, Ltd. v. Leighton, 833 F.2d 183,187 (9th
1987). "Absent prejudice, or a strong showing ofany ofthe remaining Foman factors,
exists a presumption under Rule 1

16
17 II

ofthe [Foman]

Capital, 316

d

in favor

granting

to amend."

10S2.

After review of the motion for leave to file amended counterclaims and all

18 II related

the Court concludes that Plaintiff has

made a sufficiently strong

19 II showing of the Foman factors to overcome the presumption under Rule IS(a) in favor
20 II of granting
21 II leave to

to amend.

Eminence Capital, 316

d at 10S2.

motion

amended counterclaims is granted.

B. Defendants' Motion to File Documents Under Seal (ECF No. 31)
23 II

Defendants attach a proposed amended counterclaims to their motion to file

24 II amended counterclaims. Defendants lodged conditionally under seal Exhibits A and
to the proposed amended counterclaims. (ECF No. 3S). Exhibits A
Defendant Aldava and Sherman's Compensation
Defendants contend that

is

Bare

with Plaintiff.

cause to file these exhibits under seal because

are designated as "confidential" pursuant to the parties' stipulated protective order
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14-CV-2481-WQH (OHB)

1 II signed by Magistrate Judge David Bartick.
211

"Historically, courts have

a

right to inspect and copy public

3 II records and documents, includingjudicial records and documents. '" Kamakana v. City
4 and County of Honolulu, 447 F.3d 11

1178 (9th

5 Warner Commc 'ns, Inc., 435 U.S. 589, 597 &
6 is

9

(1978». In the Ninth Circuit, there

v. State Farm Mut.

strong presumption in favor of access to court records."

7 Auto. Ins. Co., 331 F.3d 11
8

2006) (quoting Nixon v.

1135 (9th Cir. 2003); see also Kamakana, 447 F.3d

1178-79.
presumption of access to judicial

"[T]he

applies fully to

10 dispositive pleadings, including motions for summary judgment and related
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attachments .... [T]he resolution ofa dispute on the merits, whether by trial or summary

12 judgment,

at the heart of the interest in ensuring the 'public's understanding of the

13 judicial process and of significant public events. '" Kamakana, 447 F.3d at 1179
14 (quoting Valley Broadcasting Co. v.
15

Ct. for Dist. ofNev. , 798 F.2d 1289,

1294 (9th Cir. 1986». "Thus, 'compelling reasons' must be shown to seal judicial

16 II records attached to a
17 II

u.s. Dist.

An exception

motion." Id.
presumption

access applies to sealed discovery

18 II documents attached to non-dispositive motions. Id. "Specifically, the public
19 II of a need for access to court records attached only to non-dispositive motions because
20 II those documents are often unrelated, or only tangentially related, to

underlying

2111 cause of action." Id. (citations and internal quotations omitted). "A 'good cause'
22 II showing under Rule 26( c) will suffice to keep sealed records attached to non­
23 II dispositive motions." Id. at 1180.

The existence of a protective order sealing

documents is sufficient to demonstrate "good cause." Id. at 1179-80.
25 /I

Exhibits A and B are subject

the

2611 therefore shown good cause to file under seal

s protective order. Defendants
and

to the proposed

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14-CV-2481-WQH (DHB)

1 II amended counterclaims. Defendants' motion to file documents under seal is granted. 2

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C. Plaintiff's Motion to File Documents Under Seal (ECF No. 41)

3 II

Plaintifflodged two exhibits conditionally under seal in opposition to the motion

411 for leave to file amended counterclaims. (ECF No. 42). These exhibits consist of
5 portions of Defendants Sherman and Greenwoods depositions. Plaintiff contends that
6 there is good cause to seal these exhibits because they are designated as "confidential"
7 pursuant to the parties' stipulated protective order signed by Magistrate Judge David
8 Bartick.
These exhibits are subject to the Court's protective order. Plaintiffhas therefore

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10 shown good cause to file these exhibits under seal. Plaintiffs motion to file documents
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under seal is granted.

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D. Plaintiff's Motion for Leave to File a First Amended Complaint

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and Amend Scheduling Order (ECF No. 43)
a. Motion for Leave to File a First Amended Complaint

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Plaintiff requests leave to amend in order to add a claim for misappropriation of

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16 trade secrets against Defendants Aldava, Greenwood, Sherman, and Hernandez.
17 Plaintiff asserts that, "[ s]ince filing its original complaint, RHI has discovered that after
18 they left RHI, Defendants Aldava, Greenwood, Sherman, and Hernandez each
19 possessed RBI documents containing RHI's confidential business information and
20 trade secrets." (ECF No. 43-3 at 5). Plaintiff asserts that it learned information related
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to Defendants' misappropriation of trade secrets during the course of discovery.

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2 However, Defendants must file a second motion to file documents under seal
23 II if they seek to file exhibits to their First Amended Counterclaims under seal. If they
choose to do so, Defendants will be required to meet the cO!llj)ellinK reasons standard.
2411 See, e.g., Baldwin v. Us., 732 F. Supp. 2d 1142, 1145 (D. N: Mar.-I. 2010) (applying
compellmg reasons standard to complaint exhibIts filed under seal because the claims
25 themselves arose from the exhibits in question); Delphix Corp. v. Actifio, Inc., No. 13­
cv-04614 2014 WL 4145520 at * 1 n.2 (N.D. Cal. Aug. 20,2014) (to same effect)·
26' Billman Fray., LLC v. Bank;1Am. N.A., No.2: 15-cv-00088, 2015 WL 575926, at * 1
(D. Nev. FeD. 11, 2015) ("Altbough the Ninth Circuit has not ruled on the issue, other
27 II courts in this circuit have held that a party seeking to seal documents attached to the
complaint must show compelling reasons, and the court finds those cases persuasi ve.")
28 II (colfecting cases).
1

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14-CY-2481-WQH (DHB)

1 II Plaintiffcontends that

Farnan factors all weigh in favor ofgranting leave to amend.

211 "Defendants do not oppose RBI's request to file an amended complaint to add causes
3 II of action for trade secret misappropriation." (ECF No. 50 at 2).
s unopposed motion for leave

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file a first amended complaint is

granted.

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b. Motion to Amend Scbeduling Order

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Plaintiff requests that the Scheduling Order be amended as follows: (1) extend

8 II the deadline to amend pleadings "within two weeks after [Roth Staffing Companies,
911 L.r. ('Roth')] fully complies with the subpoena issued by
10 II expert disclosure deadline from May 1 201

; (2) extend Plaintiffs

to fifteen days from the date this Order

11 II is filed; (3) extend Defendants' expert disclosure deadline from May
1211 days from the date this Order
13

201

filed; and (4) to extend the deadline

to thirty

supplement

expert disclosures to forty-four days from the date this Order is filed. Plaintiff

14 that it may

required

another amended complaint, depending on Roth's (a non-

15 II party) responses to subpoena requests. (ECF No. 43
1 ne

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Court

at 7-8).

the motion to amend scheduling order to United

17 Magistrate Judge David H. Bartick, the magistrate judge assigned to this case who
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issued the Scheduling Order pursuant to Local Civil Rule 16.2.

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14-CV-2481-WQH (DBB)

1 V. Conclusion
2

IT IS HEREBY ORDERED that the motion for leave to file amended

3 counterclaims (ECF Nos. 33, 37) is GRANTED. Defendants shall file the First
4 Amended Counterclaims within ten (10) days from the date of this Order.
5 II

IT IS FURTHER ORDERED that the motions to file documents under seal (ECF

6 Nos. 31, 41) are GRANTED.
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IT IS FURTHER ORDERED that the motion for leave to file a first amended

8 complaint (ECF No. 43) is GRANTED.

Plaintiff shall file the First Amended

9 Complaint within ten (10) days from the date of this Order. The motion to amend

10 scheduling order (ECF No. 43) is REFERRED to United States Magistrate Judge David
11 II H. Bartick.
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1411 DATED: fir!

,2015

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