Gopher Media LLC. v. Spain

District Court, S.D. California·Decided November 17, 2020·No. 3:19-cv-02280·Unknown

Opinion

GOPHER MEDIA, LLC (formerly known Case No.: 3:19-cv-02280-CAB-KSC as Local Clicks) dba Doctor Multimedia, a Nevada Limited Liability Corporation, ORDER DENYING MOTION TO Plaintiff,

v. [Doc. No. 52] PHILLIP SPAIN, an individual; STEPHEN MARINKOVICH, an individual, Defendants. Before the Court is a motion by plaintiff Gopher Media, LLC (“plaintiff” or “Gopher Media”) to compel compliance with subpoenas served on nonparties Adit Advertising, Inc. (“Adit”) and its CEO Ali Jhaver (“Jhaver,” and, with Adit, the “nonparties”). Doc. No. 52. Plaintiff also requests an order of contempt against the nonparties, and for reimbursement of its reasonable expenses in bringing the Motion to Compel. Id. at 5, 7. The nonparties oppose, and request entry of a protective order in the event the Court requires them to produce any documents or information. See Doc. No. 56. For the reasons that follow, the Court DENIES WITHOUT PREJUDICE the Motion to Compel and DENIES AS MOOT the nonparties’ request for a protective order. / / Gopher Media is a digital marketing and social media services company. Doc. No. 1 at 4. Defendants Phillip Spain and Steven Marinkovich are former employees of Gopher Media who both were terminated in June 2019 and thereafter went to work for Adit, a competitor of Gopher Media. Id. at 5-9, 12. On November 27, 2019, plaintiff filed this Action, alleging that Spain and Marinkovich misappropriated its trade secrets, including client lists, event lists, sales strategies, and sales scripts, which they used to Adit’s benefit. Id. at 6, 8, 11-12. Defendants answered the Complaint on December 18, 2019, and the parties have been engaged in discovery for several months. See Doc. Nos. 7, 12, 14. On September 28, 2020, plaintiff filed a separate lawsuit against Adit, Jhaver, and two others for, inter alia, misappropriation of trade secrets, unfair business practices and civil conspiracy (the “Adit case”). See Case No. 3:20-cv-1929-CAB-KSC, Doc. No. 1. The Adit case arises out of the same alleged misappropriation of trade secrets that is the basis of this case. See generally id. Defendants in the Adit case have not answered or otherwise responded to the complaint and discovery has not yet commenced. On October 2, 2020, plaintiff served Adit and Jhaver with subpoenas for documents and testimony (the “Subpoenas”) in this action. See Doc. Nos. 52-1, 52-2, and 52-3. Each of the Subpoenas commanded a response to 41 separate requests for documents (the “Requests”), and Adit was also commanded to produce a witness to testify on 24 topics (the “Topics”).1 See Doc. Nos. 52-2 and 52-3. After receiving the nonparties’ objections to the Subpoenas, plaintiff’s counsel conferred with the nonparties’ counsel by letter, email and phone, but they were unable to resolve their disagreements. Id. at 4-6. This Motion to Compel followed. / /

1 Plaintiff did not attach its subpoena to Adit to the Motion to Compel, but did attach Adit’s responses and objections, from which the Topics and Requests are ascertainable. Counsel are reminded that this Court’s Chambers’ Rules require that “[a]ny necessary and relevant exhibits” be attached to discovery motions. The scope of discovery under the Federal Rules of Civil Procedure is broad, but “not unlimited.” Cabell v. Zorro Prods., 294 F.R.D. 604, 607 (W.D. Wash. 2013). Rule 26 provides that “parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). The scope of discovery obtainable from a nonparty by subpoena is the same as that obtainable from a party. See ATS Prods., Inc. v. Champion Fiberglass, Inc., 309 F.R.D. 527, 530-31 (N.D. Cal. 2015). However, Rule 45 imposes an affirmative duty upon parties to “take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). In determining whether a subpoena is proper, the Court “balances the relevance of the discovery sought, the requesting party’s need, and the potential hardship to the party subject to the subpoena.” Gonzales v. Google, Inc., 234 F.R.D. 674, 680 (N.D. Cal. 2006). The Court has “ʻbroad discretion’” to “ʻpermit or deny discovery.’” Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002) (citation omitted). A. The Discovery Sought Is Not Relevant To fall within Rule 26’s generous scope, the discovery sought in the Subpoenas must, at a minimum, “be relevant to the claims and defenses in the underlying case.” Gonzales, 234 F.R.D. at 680 (emphasis added). Plaintiffs’ discovery requests do not clear even this low threshold. To reiterate, plaintiff alleges in this lawsuit that defendants – two of its former employees – misappropriated Gopher Media’s client lists and other trade secrets, and that soon after they were terminated from Gopher Media in June 2019, they went to work for Adit, a direct competitor. See generally Doc. No. 1. Plaintiff states that “[i]t is also believed and alleged that Adit and Jhaver recruited Defendants to leave [plaintiff’s employ] to work for Adit and to take Plaintiff’s trade secrets to Adit.” Mot. at 2. While that may be the allegation in the Adit case, there is no allegation of wrongdoing as against Adit or Jhaver in this case. Adit is identified in this case now before the Court as the competitor for whom Spain and Marinkovich went to work after leaving Gopher Media, and Jhaver is not even referenced in the Complaint. Doc. No. 1 at 7, 10-12, 15. The references to Adit in plaintiff’s Complaint do not justify the expansive discovery plaintiff seeks from the nonparties.2 Plaintiff asserts that the requested discovery is appropriately limited because it “deal[s] primarily with Adit’s relationship with … Spain and Marinkovich.” Mot. at 6. Even if this were true, Adit’s “relationship” with defendants is not per se relevant – it must have some bearing on plaintiff’s allegation that defendants “actively and deceptively” misappropriated plaintiff’s “client related files and data, confidential records and Trade Secrets and took them … to their new employment.” Mot. at 2. Plaintiff’s conclusory assertion that Adit and Jhaver are “vital, key witnesses in this case” does not satisfy its burden to demonstrate that the discovery it seeks is relevant. See Hancock v. Aetna Life Ins. Co., 321 F.R.D. 383, 390 (W.D. Wash. 2017) (noting that burden of demonstrating relevance is on party moving to compel discovery). While defendants’ or their counsel’s communications with the nonparties (regardless of subject matter) or Spain’s and Marinkovich’s employment agreements and personnel files may illuminate the “relationship” between Adit and defendants, plaintiff has not shown how this wide-ranging information bears on defendants’ purported misappropriation of plaintiff’s trade secrets as it alleges in the Complaint. 2 The Court nevertheless rejects the nonparties’ position that they were not obligated to comply with the Subpoenas because plaintiff’s Complaint is deficient under California Code of Civil Procedure § 2019.210, which required plaintiff to identify the allegedly misappropriated trade secrets with particularity. Doc. No. 56 at 4-5. Whatever the merits of this defense, it has not been asserted by defendants

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Related

Hallett v. Morgan
296 F.3d 732 (Ninth Circuit, 2002)
Gonzales v. Google, Inc.
234 F.R.D. 674 (D. North Carolina, 2006)
Cabell v. Zorro Productions, Inc.
294 F.R.D. 604 (W.D. Washington, 2013)
ATS Products, Inc. v. Champion Fiberglass, Inc.
309 F.R.D. 527 (N.D. California, 2015)
Hancock v. Aetna Life Insurance Co.
321 F.R.D. 383 (W.D. Washington, 2017)