Judge: Anne Richardson, Case: 22STCV37970, Date: 2023-09-15 Tentative Ruling

Case Number: 22STCV37970    Hearing Date: April 12, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings

Plaintiffs High Heals Kitchen, Inc. and Michelle Mangione sue Defendants Global Cannabis Applications Corp. (Global) and Does 1 through 10 pursuant to a September 29, 2023, First Amended Complaint (FAC) alleging claims of (1) Breach of Contract and (2) Fraud.

The breach of contract claim arises from the following allegations. On or about May 14, 2019, the parties entered into a Nondisclosure Agreement (NDA). Pursuant to the NDA, the parties entered into protected discussions, in which Plaintiffs shared confidential information about their proprietary intellectual property and business strategies relating to a unique algorithm to standardize measuring THC and CBD levels in cannabis products. Global offered to buy the proprietary technology for $5 million, which Plaintiffs declined in favor of a higher offer or a licensing agreement. Thereafter, Global probed into, and Plaintiffs shared information regarding, Plaintiffs’ intended incorporation of blockchain and data collection into their dosing algorithm and their business plans relating to the development of universal regulatory standards for the cannabis industry. This further sharing of information was prompted by representations from Global that it would attempt to raise further monies for purchase and that Global would be interested in a collaborative partnership. Global subsequently developed a patent that incorporated the misappropriated confidential information shared by Plaintiffs, thus breaching various specifically identified clauses in the NDA and harming Plaintiffs as a result.

The fraud claim arises from allegations that Global used the confidential information disclosed by Plaintiffs to develop its own patent while simultaneously making false representations to Plaintiffs that Global intended to either purchase their proprietary dosing technology or enter a collaborative partnership. Global made these false representations so that it could continue to mine Plaintiffs for confidential information about the applicability of the technology in the cannabis industry and Plaintiffs’ strategies relating to global deployment, including Plaintiffs’ work developing global standards for the American Society for Testing and Materials (ASTM), all with no intention of ever moving forward on these plans. Plaintiffs justifiably relied on these representations in sharing the confidential information pursuant to the NDA and were harmed by these actions in releasing proprietary information without benefit of the bargain.

B. Relevant Procedural History

On November 9, 2023, Plaintiffs served their Requests for Production of Documents, Set One (RDPs, Set One).

On January 18, 2024, Global served its responses to RPDs, Set One.

On January 29, 2024, Plaintiffs’ counsel emailed Global’s counsel to request an extension for a motion to compel further responses to March 19, 2024, to which Global’s counsel agreed.

On March 8, 2024, Plaintiffs’ counsel emailed Global’s counsel to request a further extension to April 5, 2024.

Between March 11, 2024, and March 13, 2024, counsel met and conferred, with Global’s counsel ultimately refusing to stipulate to a further extension.

On March 14, 2024, after review of Global’s responses, Plaintiffs’ counsel requested further responses to RPDs, Set One, from Global.

On March 15, 2024, counsel met and conferred via Zoom, with Global’s counsel only agreeing to meet and confer as to RPDs, Set One, Nos. 17 and 19, according to Plaintiffs’ counsel.

On March 16, 2024, Plaintiffs’ counsel emailed a meet and confer letter stating the grounds for a motion to compel further discovery.

C. Motion Before the Court

On March 19, 2024, Plaintiffs filed a motion to compel further responses to RPDs, Set One, Nos. 8, 22-43, 46-48, and 57-62.

On March 28, 2024, Global filed a supplemental response to RPDs, Set One, No. 8.

On March 29, 2024, Global filed an opposition to Plaintiffs’ March 19, 2024, motion. Global’s opposition fails to attach a separate statement, hampering the Court’s ability to address Global’s arguments in support of its opposition.

On April 5, 2024, Plaintiffs filed a reply to Global’s opposition.

Plaintiffs’ motion is now before the Court.

II. Motion to Compel Further Production

A. Legal Standard

A motion to compel a further response is used when a party gives unsatisfactory answers or makes untenable objections to interrogatories, demands to produce, or requests for admission. (See Code Civ. Proc., § 2031.310, subd. (a); Sinaiko Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 403.)

To request further production, a movant must establish: (1) good cause for the production (Code Civ. Proc., § 2031.310, subd. (b)(1); Sinaiko, supra, at p. 403); and (2) that a further response is needed because (a) the responding party’s statement of compliance with the demand to produce is incomplete Code Civ. Proc., § 2031.310, subd. (a)(1)), (b) the responding party’s representation that it is unable to comply is inadequate, complete, or evasive (Code Civ. Proc., § 2031.310, subd. (a)(2)), (c) the responding party’s objection in the response is without merit or is too general (Code Civ. Proc., § 2031.310, subd. (a)(3); Catalina Island Yacht Club v. Superior Court (2015) 242 Cal.App.4th 1116, 1127), or (d) if the responding party objected to the production of ESI on the ground that it is not reasonably accessible the movant can show that the (i) ESI is reasonably accessible or (ii) there is good cause for production of the ESI regardless of its accessibility (Code Civ. Proc., § 2031.310, subd. (e)).

B. Analysis

1. RPDs, Set One, Nos. 8, 22-43, 46-48, and 57-62

RPDs, Set One, Nos. 8, 22-43, 46-48, and 57-62 can generally be summarized as follows:

(1) RPDs, Set One, No. 8 requests documents relating to Global’s drafting of patent applications in Canada;

(2) RPDs, Set One, Nos. 22-39 request documents and communications relating to the development, marketing, and sales of Global’s products Efixxi, clearESG, and Prescriptii (hereafter, not including “any other competitive [Global] products,” the Global Products);

(3) RPDs, Set One, Nos. 40-43 request documents showing the total gross and net revenues, sales prices, quantity sold, and gross profits, net profits, and profit margins for each of the Global Products;

(4)  RPDs, Set One, Nos. 46-48 request documents relating to the testing, commercialization, and licensing policies for the Global Products (including royalties and other types of payments); and

(5) RPDs, Set One, Nos. 57-62 request documents and/or communications relating to business plans for use of the Global Products (including profit projections) from January 1, 2018 to the present, customer feedback of the Global Products, dates of design and development for the Global Products, presentation material used at seminars, exhibitions, convention, or trade shows related to the Global Products, and user manuals for the Global Products.

(Mot., Ohanian Decl., Ex. A.)

2. Global’s Responses

In response to RPDs, Set One, Nos. 8, 22-43, 46-48, and 57-62, Global served objection-only responses based on the following objections:

(1) Lack of relevance or no likelihood to lead to discovery of admissible evidence (RPDs, Set One, Nos. 8, 22-43, 46-48, 57-62);

(2) Requests are not described with the requisite reasonable particularity (RPDs, Set One, Nos. 8, 22-39, 46-48, 57-60);

(3) Because of point (2), the requests are overbroad, oppressive, and unduly burdensome (RPDs, Set One, Nos. 8, 22-39, 46-48, 57-60);

(4) Overbreadth as to scope, time, and/or jurisdiction (RPDs, Set One, Nos. 8 [includes jurisdiction], 22-43, 46-48, 57-62 [no jurisdiction]);

(5) Requests seek confidential, proprietary, and trade secret information (RPDs, Set One, Nos. 8, 22-43, 46-48, 57-62);

(6) Attorney-client and/or work product privileges (RPDs, Set One, No. 8);

(7) Vagueness and ambiguity as to term at issue (RPDs, Set One, Nos. 46-48); and

(8) Compound question (RPDs, Set One, Nos. 60).

(Mot., Ohanian Decl., Ex. B.)

3. Court’s Determination

a. RPDs, Set One, No. 8: MOOT.

The Court determines that Plaintiffs’ motion is MOOT as to RPDs, Set One, No. 8.

Further supplemental responses were served in relation to this RPD by Global on March 28, 2024. (Opp’n, Chaney Decl., ¶ 5, Ex. 1; see Reply, pp. 3-6 [discussing RPDs, Set One, Nos. 22-39, 40-43, 46-48, 57-62 but no RPDs, Set One, No. 8].) A further § 2031.210 or § 2031.320 motion may be brought as applicable.

b. RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62: GRANTED.

i. Relevance

The Court finds that discovery relating to the Global Products— Efixxi, clearESG, and Prescriptii—is facially relevant.

“‘Relevant evidence’ means evidence, including evidence relevant to the credibility of a witness or hearsay declarant, having any tendency in reason to prove or disprove any disputed fact that is of consequence to the determination of the action.” (Evid. Code, § 210.)

As described by the moving papers, evidence relating to the Global Products can be relevant because it may lead to the discovery of admissible evidence that tends to prove or disprove “the extent of Defendant’s use of Plaintiffs’ innovative technologies, and to determine the damages resulting from Defendant’s breach of the NDA and fraud.” (Mot., p. 11 [argued in relation to RPDs, Set One, Nos. 22-30, 46-49].) Otherwise stated, discovery into the Global Products is relevant insofar as Plaintiffs seek to determine whether the Global Products were produced by wrongfully using proprietary information obtained by Defendants from Plaintiffs in breach of the parties’ agreements and laws relating to fraud.

Regarding RPDs, Set One, Nos. 22-39, 40-43, and 57-62, the discovery of development evidence for the Global Products could permit discovery into, for example, whether the Global Products are derivative of Plaintiffs’ proprietary information. And the discovery of marketing, sales, business plans, customer feedback, and seminar, etc. evidence for the Global Products can permit discovery into, for example, when these products came into being, the profits earned by Global as a result, and damages suffered by Plaintiffs as measured by Global’s profits or Plaintiffs’ corresponding losses.

Regarding RPDs, Set One, Nos. 46-48, the discovery of testing, commercialization, and licensing of the Global Products can, for example, lead to evidence that Global’s patents derive from Plaintiffs’ proprietary information, e.g., lack of right to sell products based on illegality.

ii. Global’s Initial Objections

The Court first determines that the relevance objection raised by Global in its initial responses to RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62 lacks merit as discussed in the preceding subsection.

Second, the Court determines that the requests are described with sufficient particularity. Global’s objection based on failure to describe a specific type of communications or documents in relation to RPDs, Set One, Nos. 8, 22-39, 46-48, and 57-60 lacks merit because the Court determines that these requests are qualified as involving the development, marketing, sales, testing, commercialization, licensing policies, business plans, etc. of Global’s products.

Third, Global’s objections that RPDs, Set One, Nos. 8, 22-39, 46-48, and 57-60 are overbroad, oppressive, and unduly burdensome also fail, for the same reasons.

Fourth, the scope and time of the requests is not overbroad for two reasons. The requests are necessarily limited by the parties’ interactions, which are alleged to have taken place in 2018 and 2019. Moreover, evidence of when the Global Products came into being, how they came into being, and the monies derived therefrom is relevant to damages if Plaintiffs can prove that the Global Products are derivative of Plaintiffs’ proprietary information.

Fifth, the confidential, proprietary, and trade secret information objections are only cursorily stated in the initial objections to RPDs, Set One, Nos. 8, 22-43, 46-48, and 57-62, the opposition points and authorities fail to develop this objection, and the record completely fails to show that Global filed a separate statement.

Sixth, the attorney-client privilege can be raised subject to a privilege log or protective order, as applicable. Moreover, as with the objections discussed in the preceding paragraph, Global has insufficiently elaborated this objection.

Last, the vagueness, ambiguity, and compound question objections are without merit. RPDs, Set One, No. 8, 46-48, and 60 are clear.

iii. Opposition Arguments

Regarding RPDs, Set One, Nos. 22-39, the Court finds no merit to the argument that the sought-after discovery does not relate to the already-established universe of allegations in the operative pleadings. First, the standard is whether the production requests could lead to the discovery of admissible evidence. Here, for example, RPDs, Set One, Nos. 22-39 could support a breach of the NDA insofar as information wrongfully obtained by Global in breach of those agreements could have resulted in the development of the Global Products. Second, the discovery could lead to the production of documents showing additional harms and injuries to Plaintiffs as a result of wrongful conduct by Defendants.

The Court finds some merit in Global’s argument that the causal link between information derived from the parties’ interactions and the development of the Global Products is not entirely clear. (See Opp’n, pp. 5-9.) For example, the moving papers do not indicate whether Plaintiffs have knowledge to establish that Global created the Global Products only after interacting with Plaintiffs and entering the NDA, supporting an inference that the creation of the Global Products benefitted from use of Plaintiffs’ propriety information. However, absent evidence from Global that these products were developed prior to interactions with Plaintiffs, the Court finds that the requested information remains discoverable. This opposition argument is thus unavailing.

Any possible abuse or intrusiveness in RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62 can be mitigated through production under the existing protective order signed on January 9, 2024 (Opp’n, p. 9).

Global’s past production of documents relating to RPDs, Set One, Nos. 40-43 is an insufficient ground absent a proper showing of undue prejudice, which is not present here. (Code Civ. Proc., § 2019.030, subds. (a)(1)-(2); Carter v. Superior Court (1990) 218 Cal.App.3d 994, 997 [duplicate discovery as to the same subject permitted in different forms—§ 2031 production requests and deposition production requests—even if duplicative, absent § 2019.030 showing].)

Global fails to attach a separate statement to the opposition papers, thus failing to further elaborate on Global’s arguments for denying Plaintiffs’ motion as to each request involved in RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62.

The Court notes that Global fails to raise objections in relation to its foreign status, thus waiving objections for lack of jurisdiction as to RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62. (See Mot., Ohanian Decl., Ex. B, Response to RPDs, Set One, No. 8 [raising jurisdiction]; cf. id. at Responses to RPDs, Set One, Nos. 22-39, 40-43, 46-48, 57-62 [no jurisdiction argument].)

iv. Final Determination

Based on the above determinations, the Court GRANTS Plaintiffs’ motion, with any documents designated as Confidential subject to the Protective Order entered in this case. 

III. Conclusion

Plaintiffs Michelle Mangione and High Heals Kitchen, Inc.’s Motion to Compel Further Responses to Requests for Production is MOOT in part and GRANTED in part:

(1) MOOT as to RPDs, Set One, No. 8; and

(2) GRANTED as to RPDs, Set One, Nos. 22-39, 40-43, 46-48, and 57-62.