Wealthy Inc. v. Cornelia

District Court, D. Nevada·Decided October 4, 2022·No. 2:21-cv-01173·Unknown

Opinion

* * *

WEALTHY INC. and DALE BUCZKOWSKI, Case No. 2:21-cv-01173-JCM-EJY

Plaintiffs, ORDER v.

LLC, and CORNELIA EDUCATION LLC, Defendants. Pending before the Court is Defendants’ Motion to Compel, the Response, and Reply (ECF Nos. 45, 54, and 58), as well as Defendants’ Motion for Extension of Discovery, the Opposition, and Reply (ECF Nos. 44, 50, and 55). I. Background A. The Motion to Compel. The Motion to Compel arises from Plaintiff Buczkowski’s deposition at which Defendants sought information about Plaintiffs’ customers beyond names and billing addresses previously produced under the Protective Order as “Attorneys Eyes Only” information.1 During the deposition, and by way of example only, Defendants asked Buczkowski to name a client who paid $75,000 for one-on-one coaching. ECF No. 45-2 at 3. Buczkowski responded: “There are several people that have paid me more than that. I would say it’s a trade secret to say those people’s names.”2 This response led to the following exchange:

Q: I don’t care if it’s a trade secret. It’s not privileged, and its not subject to a protective order. Answer the question. Objection by Plaintiff’s Counsel: Well, it is privileged, and under Nevada law, it is trade secret information.

Q: You can answer the question. You can maybe designate it confidential, but I get to ask him.

1 Going forward, Plaintiff Dale Buczkowski is referred to as “Buczkowski” while Buczkowski and Wealthy, Inc. Q; Name one person who spent more than $75,000 with you.

A: I’d be happy to answer the question if I knew the law better in this area. I feel like you’re asking me to divulge trade secrets, and I don’t know that I’m legally required to do that. I don’t believe that I am, and my Counsel has advised me as much under Nevada law that I’m not required to do that. Id. at 4. After this exchange, and with confirmation that Buczkowski would not provide the information requested, Counsel for Plaintiffs stated that he would seek a protective order regarding the above question, but that Defendants should ask any other questions they had. Id. at 4, 7.3 Defendants then asked questions about an allegation pertaining to Buczkowski’s hair and how much those comments damaged Plaintiffs—responses were provided. Id. at 5-6. Defendants also asked questions regarding: (i) how Plaintiffs categorized their clients; (ii) what would be reflected on a particular Facebook page; (3) the Moneyberg.com home page; (iv) Plaintiffs’ YouTube page; and (v) a deceased woman, all of which were answered. Id. at 8-10. Defendants then returned to questions regarding Plaintiffs’ client information including names, what such individuals do for a living, and why these clients hired Plaintiffs. Id. at 12. Defendants also stated they had “a whole lot of questions” they were willing to designate as Attorneys Eyes Only. Id. More exchanges took place leading Defendants to ask Buczkowski to identify information about Plaintiffs’ top five clients, labeling them only as “A” through “E.” When asked for Mr. A’s profession, Buczkowski said he “was not going to be able to keep track of A, B, C, D, E,” but in general of his “top five or 10 clients, … a couple … are in technology related professions … they are employees in large tech companies. Some are small business owners of various kinds.” Id. at 14-15. When asked what type of small business Plaintiffs’ clients own, Buczkowski refused to answer claiming he would not say “specific things … that would identify a client.” Id. at 15. Buczkowski also would not identify what kind of small business any client was in. Id. When Defendants asked if Plaintiffs have a client in Illinois, Buczkowski responded: “I think you guys are going to have to get a protective order that – I can imagine the next number of comments trying to bing, bing, bing, bing.” Id. at 16. Plaintiffs’ counsel then said “Yeah,” and Buczkowski said “These are trade secrets that could be harmful to my clients.” Defendants asked if Plaintiffs would disclose what state someone was in, to which Buczkowski responded Defendants “were not being reasonable at the moment,” but then shared that Plaintiffs’ clients are in numerous states. Id. Buczkowski could not answer if he had any clients in California, after which Defendants decided to suspend the deposition and stated they would file a motion to compel. Id. at 17. Defendants’ counsel explained to Plaintiffs’ counsel that he did not believe Buczkowski was being candid about his damages and that Defendants could not test that “without exploring who … [Plaintiffs’] clients are [and] what they pay … for. Id. at 17. In their Motion, Defendants explain they must be able to test Plaintiffs’ damages claim by finding out if Plaintiffs’ customers have ever heard of Defendants’ allegedly defamatory videos. ECF No. 45 at 3. Defendants further argue that the Attorneys Eyes Only designation available under the Protective Order demonstrates Plaintiffs have no basis for concern that any third party or the Defendants themselves would learn of the information provided. Id. at 4. Defendants cite to numerous cases holding that trade secret information is properly produced when given appropriate protections by a court, such as an Attorneys Eyes Only designation. Id. at 5. Defendants state, that in this case, Plaintiffs have previously produced a large volume of documents pursuant to this designation without issue. Id. Plaintiffs argue that its objections at deposition are a reiteration of objections made to document requests regarding client names. ECF No. 54 at 3 citing Ex. 2.4 Plaintiffs further rely on NRS 49.325, which Plaintiffs reiterate creates a bar to production of privileged information. In addition, Plaintiffs contend that the Protective Order in place “cannot adequately protect Plaintiffs’ significant confidentiality and proprietary business interests.” Id. at 3 citing ECF No. 54-2 at 6. Plaintiffs argue that their “client lists and client identities are trade secrets because” Buczkowski has “gone to great lengths to maintain the secrecy of that information which is not readily available to the public or to competitors.” Id. at 5. Plaintiffs state that because Defendants did not object to the non-disclosure of client names when Plaintiffs responded to Defendants’ document requests, Defendants were precluded from seeking this information at deposition. Id. at 5-6. Plaintiffs also claim Defendants’ Motion is untimely and their request is “unreasonable” because Defendants seek discovery on “an unlimited subject matter.” Id. at 6-7. In their Reply, Defendants argue Plaintiffs’ boilerplate objection asserting trade secret was ineffective and the Nevada trade secret privilege is inapplicable. ECF No. 58 at 3. Defendants point to NRS 49.325(b) which states that “[w]hen disclosure is directed, the judge shall take such protective measure as the interest of the holder of the privilege and of the other parties and the furtherance of justice may require.” Defendants reiterate that Plaintiffs produced other information for Attorneys Eyes Only “that contained names and other information about individual customers” without objection. Id. Defendants argue their Motion is timely and that their request is narrowly tailored, but that answers to one question may lead to others and Defendants do not want Plaintiffs to be able to refuse to answer questions related to the client information sought. B. The Motion for Extension of Discovery. Defendants ask the Court for additional time to conduct discovery, including the deposition of John Mulvehill who is alleged to live in Brazil. Mr. Mulvehill is said to be unavailable before the close of discovery, but willing to sit for deposition some time later. Defendants

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Wealthy Inc. v. Cornelia, (D. Nev. 2022).

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