Judge: Daniel S. Murphy, Case: 23STCV07020, Date: 2023-10-20 Tentative Ruling

Case Number: 23STCV07020    Hearing Date: April 19, 2024    Dept: 32

BACKGROUND

            On March 30, 2023, Plaintiff Lynwood Santa Fe, LLC filed this action against Defendants Advanced Labs, Inc. and Advanced Nutrients Ltd. for breach of lease and breach of guaranty arising from unpaid rent.

            On March 22, 2024, Plaintiff filed the instant motion to uphold confidential designation. Defendants filed their opposition on April 8, 2024. Plaintiff filed its reply on April 12, 2024.

LEGAL STANDARD

The recipient of a document demand may move for a protective order. (Code Civ. Proc., § 2031.060(a).) “The court, for good cause shown, may make any order that justice requires to protect any party or other person from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Id., subd. (b).) “The issuance and formulation of protective orders are to a large extent discretionary.” (Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 316.) “[T]he burden is on the party seeking the protective order to show good cause for whatever order is sought.” (Id. at p. 318.)

DISCUSSION

            A protective order may be used to prevent disclosure of “a trade secret or other confidential research, development, or commercial information.” (Code Civ. Proc., § 2031.060(b)(5).) The protective order in this case provides that “[t]he 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.” (Gershman Decl., Ex. 2 ¶ 2.)

            Plaintiff avers that due to the nature of the business transaction at issue, “many of Plaintiff’s produced discovery records concern Plaintiff’s confidential, private and sensitive business and commercial information, and include documents such as financial information, loan documents, internal communications, and the like.” (Gershman Decl. ¶ 2.) Plaintiff argues that “[d]isclosure of Plaintiff’s private business information would create a substantial risk of injury if disclosed to the public—including potential competitors, renters, or purchasers.” (Mtn. 9:9-11.) This sufficiently establishes good cause for a confidential designation.

            Defendants object to Plaintiff’s designation of its entire production as confidential. However, given the nature of the case and the information sought, the entire production may well be confidential. Defendants’ own meet and confer letter acknowledges that the production consists of “(1) communications between the parties regarding lease negotiations and rental payments; (2) lease statements; (3) CAM reconciliations; (4) contracts between the parties; (5) cannabis licenses; (6) three (3) day notices and proofs of service; and (7) listing agreements, letters of intent and offers.” (Gershman Decl., Ex. 3.) Defendants identified these as “business documents involving commercial transactions.” (Ibid.) This actually confirms that the production contains “non-public information that is entitled to confidential treatment under applicable law.” (Id., Ex. 2 ¶ 2.) Defendant correctly points out that publicly recorded documents are not confidential, but Plaintiff has already agreed to de-designate those documents. (Id., Ex. 4.) Defendant does not otherwise explain why the remaining documents are not confidential.

            The protective order places the burden on Defendant to justify its objections. (See Gershman Decl., Ex. 2 ¶ 6 [requiring the objecting party to “advise counsel for the Designating Party, in writing, of such objections, the specific Documents, Testimony or Information to which each objection pertains, and the specific reasons and support for such objections”].) Defendant did not identify any particular document as non-confidential nor provide an explanation. As discussed above, Plaintiff has established that a confidential designation is warranted for its entire production, save for certain publicly recorded documents. Defendant cites to Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal.App.4th 261, 319 for the proposition that sweeping protective orders are an abuse of discretion. However, the parties here stipulated to the standard form protective order, and the Court did not issue a sweeping protective order. Instead, the issue here is the proper designation for documents produced under the protective order. The Court finds that the documents have been properly designated as confidential.  

CONCLUSION

            Plaintiff’s motion to uphold confidential designation is GRANTED.