Judge: Craig Griffin, Case: Fortune Management Systems v. Brusch, Date: 2022-11-21 Tentative Ruling

Defendants Chase Whitaker, Dyllon Whitaker, and Aesthetic Development Group (collectively, “Moving Defendants”) seek an order upholding the “Confidential” designation of certain documents produced in discovery pursuant to the Stipulated Protective Order (“SPO”) entered in this case on April 4, 2022.  (ROA 238.)

Moving Party’s Motion is GRANTED in part and the SPO is modified as set forth below.

According to the SPO, the “Designating Party shall have the right to designate as “Confidential” any Documents, Testimony or Information that the Designating Party in good faith believes to contain non-public information that is entitled to confidential treatment under applicable law.”  (SPO ¶ 2.)

Per the SPO, “Confidential Materials shall be used by the persons receiving them only for the purposes of preparing for, conducting, participating in the conduct of, and/or prosecuting and/or defending the Proceeding, and not for any business or other purpose whatsoever.  (SPO ¶ 8.)  “Proceeding” is defined as the current proceeding, Case No. 30-2021-01204964.  (SPO ¶ 1(a).) 

Plaintiff Fortune Management Systems (“Plaintiff”) objects to Moving Defendants’ “Confidential” designations of certain bank account statements and corporate tax returns.  (See Opp. 1:10-14.)  Plaintiff objects on the grounds that keeping these documents “Confidential” would impose unnecessary and unjustified burden against using them as exhibits and referencing the data in dispositive motions and at trial.  Plaintiff also contends that the documents are needed in the related probate matter, In re Estate of Andrew Webb Whitaker, OC Superior Court Case No. 30-2020-01127901-PR-LA-CJC (the “Probate Case”), in order for the Administrator in that matter to provide a proper accounting of the estate’s assets.

Per the SPO, Moving Defendants have the burden of establishing the applicability of its “Confidential” designation.  (SPO ¶ 6.)  Moving Defendants have failed to meet that burden.  Moving Defendants cite no legal authority whatsoever in their moving papers or reply brief to establish the applicability of their “Confidential” designation to the specific documents at issue.  Moving Defendants only summarily argue that they designated the documents in good faith and that the documents are confidential business records, but again they provide absolutely no legal authority to support their position that these documents are entitled to confidential treatment “under applicable law”.  (SPO ¶ 2.)  Moving Defendants also appear to argue that the documents contain confidential information regarding their business operations, but they provide no facts to support this claim.  Further, it is unclear how bank account statements and tax returns would contain confidential information about how a business is conducted.  Thus, Moving Defendants failed to meet their burden on this motion.

However, given that the documents at issue consist of financial records of the parties – documents which clearly implicate a privacy right (see, e.g., Cobb v. Sup.Ct. (1979) 99 Cal.App.3d 543, 550; Fortunato v. Sup.Ct. (Ingrassia) (2003) 114 Cal.App.4th 475, 481) – the Court finds that a complete de-designation of the documents is not warranted.

The Court will thus GRANT the motion in part by allowing the “Confidential” designation of the subject documents to remain in place, but will modify the SPO to permit the documents to be used in connection with the Probate Case as Moving Defendants have not sufficiently demonstrated any overriding interest in the documents.  Upholding the confidential designation and limiting use of the documents to this proceeding and the Probate Case should assuage any concerns Moving Defendants have regarding improper dissemination of their confidential business information to competitors.  (See Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360, 371.)

Accordingly, the Court upholds the “Confidential” designation of the subject documents, but modifies the SPO to permit the subject documents to be used by the parties only for the purposes of preparing for, conducting, participating in the conduct of, and/or prosecuting and/or defending this Proceeding and the Probate Case.

The Court also reminds the parties of their obligation pursuant to the SPO that they are to designate materials confidential in good faith.  (SPO ¶ 2.)  A blanket designation of over 77,000 documents produced does not appear to the Court to be in good faith.

Plaintiff’s ex parte application (ROA 242) is MOOT, given the Court’s ruling on Moving Defendants’ motion.

Counsel for Plaintiff to give notice.