R. R. Donnelley & Sons Co. v. Pappas

District Court, E.D. California·Decided April 12, 2024·No. 2:21-cv-00753·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 R. R. DONNELLEY & SONS CO., No. 2:21-cv-00753 DJC AC 12 Plaintiff, 13 v. ORDER 14 JOHN PAPPAS, et al., 15 Defendants. 16 17 Presently before the Court is Plaintiff’s Motion for Contempt based on a 18 number of alleged violations of the Court’s Preliminary Injunction Order. Plaintiff 19 claims that Defendant Pappas deleted files from his computers and failed to provide 20 storage devices and accounts in violation of that order. 21 For the reasons stated below, the Court grants in part and denies in part 22 Plaintiff’s motion (ECF No. 47)1. 23 BACKGROUND 24 Plaintiff R. R. Donnelley & Sons Co. filed this action on April 26, 2021 (see ECF 25 No. 1) seeking to prevent Defendant John Pappas III, a former employee of Plaintiff, 26

27 1 Several documents filed related to this motion have been filed or lodged under seal. Where there is a redacted version available on the docket for this action, citations will be to that docket entry, though 28 referenced information may be redacted in those versions. 1 from using Plaintiff’s allegedly proprietary and confidential documents for his new 2 employer, Defendant Dome Printing2. Shortly after filing the complaint, Plaintiff filed a 3 motion seeking a Temporary Restraining Order. (ECF No. 4.) Two days later, Plaintiff 4 and Defendant Pappas stipulated to a Preliminary Injunction instead. (ECF No. 10.) 5 District Judge John A. Mendez subsequently signed that Preliminary Injunction on 6 April 30, 2021 and it was added to the docket on May 3, 2021 (Prelim. Inj. Order (ECF 7 No. 12).) 8 The Preliminary Injunction contained four main provisions. The first enjoined 9 Defendant Pappas from “using, disclosing, exploiting, transmitting, copying, or 10 accessing . . . any [of Plaintiff’s] confidential, proprietary, and/or trade secret 11 information” or “deleting or manipulating” any of that same information if Defendant 12 Pappas had copied or taken it from Plaintiff. (Prelim. Inj. Order at 2.) The second 13 compelled Defendant Pappas to make his “personal electronic data storage system(s) 14 and/or personal computer(s)” available to a third-party forensic analyst (later 15 determined to be Berkeley Research Group or “BRG”) and to turn over to Plaintiff any 16 “hard copy” records containing Plaintiff’s confidential information. (Id. at 2–3.) The 17 third compelled Defendant Pappas to “preserve all evidence, whether electronic or 18 otherwise, related in any way to this matter.” (Id. at 3–4.) Lastly, the order compelled 19 Defendant Pappas to respond to a set of discovery requests. (Id. at 4.) 20 On April 6, 2022, Plaintiff filed a Motion for Contempt, claiming that Defendant 21 Pappas violated the Preliminary Injunction by deleting “hundreds of responsive files” 22 on May 4, 2021, deleting an additional 19 items on May 12, 2021, failing to produce 23 six USB drives to BRG, and failing to produce his Dropbox account to BRG. (Pl.’s Mot. 24 (ECF No. 47) at 18–19.) Plaintiff alleges the May 4, 2021 and May 12, 2021 deletions 25

26 2 Due to some confusion about the names and relationships of multiple interconnect corporate entities, the original Complaint alleged that Defendant Pappas was hired by “Dome Printing”, though this entity 27 was not named as a defendant. (See ECF No. 1 at 2.) Subsequent amendments to the Complaint have clarified that Defendant Pappas was actually alleged to have been hired by “Mereliz Inc.” who was 28 doing business as “Dome Printing”. (See ECF No. 31 at 2.) 1 violated the first and third provisions of the Preliminary Injunction and that failure to 2 produce the USB drives and Dropbox account violated the third provision of the 3 Preliminary Injunction. (Id.) Defendants Meriliz and Pappas opposed the motion (Def. 4 Pappas’ Opp’n (ECF No. 59)) and Plaintiff filed a reply (Pl.’s Reply (ECF No. 63)). 5 Shortly after the motion for contempt was filed, this matter was transferred from 6 Judge Mendez to District Judge Kimberly J. Mueller as a result of Judge Mendez’s 7 senior status. (ECF No. 53.) The case was again reassigned a few months later to 8 District Judge Dale A. Drozd. (ECF No. 74.) It was reassigned for a third time to the 9 undersigned on April 6, 2023. (ECF No. 104.) Likely due to confusion caused by 10 these reassignments, the present motion has remained unresolved despite being fully 11 briefed on June 6, 2022. 12 The Court also notes that in response to a minute order inquiring with the 13 parties about whether this motion remained pending, Plaintiff raised arguments about 14 other alleged violations of a protective order. (See ECF No. 153.) These arguments 15 are not before the Court in the complete briefing on the present Motion for Contempt 16 and will not be addressed. Similarly, Defendant argued that the Court “may wish to 17 rule on the contempt motion after considering Defendants’ Daubert motion” 18 regarding Dr. Shane Shook as “[Dr. Shook’s] declaration underlies assertions in the 19 Motion for Contempt.” (See ECF No. 150.) The present motion was filed and fully 20 briefed long before any Daubert motion was filed by Defendants and the Motion for 21 Contempt can properly be considered without first ruling on the Daubert Motion as to 22 Dr. Shook. Moreover, the validity of Dr. Shook’s analysis is not relevant for 23 determining whether Defendant Pappas violated the terms of the stipulated 24 Preliminary Injunction. 25 LEGAL STANDARD 26 A district court has an inherent power to enforce its own orders and hold 27 anyone who violates them in civil contempt. Davies v. Grossmont Union High School 28 Dist., 930 F.2d 1390, 1393 (9th Cir. 1991). A court can wield this power either to 1 coerce compliance with the order or “to compensate the complainant for losses 2 sustained.” Shell Offshore Inc. v. Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016). 3 A party moving for contempt must show the non-moving party violated the Court’s 4 order by clear and convincing evidence. Irwin v. Mascott, 370 F.3d 924, 932 (9th Cir. 5 2004). There is no express “good faith” exception and the violation need not be willful 6 or intentional “[b]ut a person should not be held in contempt if his action ‘appears to 7 be based on a good faith and reasonable interpretation of the [court's order].’” In re 8 Dual-Deck Video Cassette Recorder Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 9 1993). “Substantial compliance” with a court order is also a defense against civil 10 contempt as “a few technical violations” are not a violation where “every reasonable 11 effort has been made to comply” with the court’s order. Id. A party must have fair and 12 well-defined notice of what conduct is required or prohibited by an injunction to be 13 held in contempt of it. Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1132 14 (9th Cir. 2006). 15 The Ninth Circuit has distilled the above rules down to a three prong test. To 16 succeed on a motion to hold a party in civil contempt, the moving party must show by 17 clear and convincing evidence that (1) the non-moving party violated the terms of the 18 Court’s order, (2) that the non-moving party’s violations went beyond “technical 19 violations” that would consistent with “substantial compliance”, and (3) the non- 20 moving party’s violations were not based on good faith or reasonable interpretation of 21 the court’s order. See United States v. DAS Corp., 18 F.4th 1032, 1040 (9th Cir. 2021).

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