Judge: Deirdre Hill, Case: 22TRCV00339, Date: 2023-05-05 Tentative Ruling

Case Number: 22TRCV00339    Hearing Date: May 5, 2023    Dept: M

Hearing Date:                         May 5, 2023   

Moving Parties:                      Defendants STM Group, Inc. and STM Atlantic N.V.

Responding Party:                  Plaintiff Bronzelink Holdings Limited

Motion for Protective Order

            The court considered the moving, opposition, and reply papers.

RULING

            The motion is GRANTED.

BACKGROUND

On May 4, 2022, plaintiff Bronzelink Holdings Limited, a British Virgin Islands corporation, filed a complaint for recognition of foreign country money judgment under CCP §1713, et seq.

LEGAL AUTHORITY

            Under CCP §2030.090, “(a) When interrogatories have been propounded, the responding party, and any other party or affected natural person or organization may promptly move for a protective order.  This motion shall be accompanied by a meet and confer declaration under Section 2016.040.

(b) The court, for good cause shown, may make any order that justice requires to protect any party or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.  This protective order may include, but is not limited to, one or more of the following directions: . . . . (4) That the response be made only on specified terms and conditions.”  See also CCP §2033.080 (referring to requests for admission).

Under CCP §2031.060, (a) When an inspection, copying, testing, or sampling of documents, tangible things, places, or electronically stored information has been demanded, the party to whom the demand has been directed, and any other party or affected person, may promptly move for a protective order.  This motion shall be accompanied by a meet and confer declaration under Section 2016.040.

(b) 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.  This protective order may include, but is not limited to, one or more of the following directions: . . . .

(5) That a trade secret or other confidential research, development, or commercial information not be disclosed, or be disclosed only to specified persons or only in a specified way.”   all or some of the items or categories of items in the demand need not be produced or made available at all. . . .”

            With respect to protective orders generally, the burden of showing good cause is ordinarily on the party seeking the protective order.  Beverly Hills Nat. Bank & Trust Co. v. Superior Court (1961) 195 Cal. App. 2d 861, 866-67.

DISCUSSION

            Defendants STM Group Inc. and STM Atlantic N.V. request a protective order, modeled after the superior court’s “Model Stipulation and Protective Order – Confidential Designation Only,” to prevent plaintiff Bronzelink from using any confidential material it obtains in discovery in this action in any other litigation, including a pending winding up petition in the Cayman Islands that involves Bronzelink and the principals of the STM Parties and an ongoing arbitration before the Hong Kong Arbitration Centre in which Bronzelink is the claimant and STM Atlantic and its principals are respondents, counter-claimants, and cross-claimants.

The complaint alleges that on March 12, 2020, a Winding-Up Petition was presented by Campbells seeking the winding up of Global IP before the Grand Court of the Cayman Islands, Financial Services Division, at Cause No. FSD 47 of 2020.  Complaint, ¶4.  By summons dated March 13, 2020 (“JPL Summons”), as part of the same action, an application for the appointment of Joint Provisional Liquidators was submitted by STM Atlantic N.V.  Id., ¶5.  Bronzelink opposed both the petition and appointment of Joint Provisional Liquidators and (1) by summons dated April 1, 2020 sought the striking of the petition (“Strike Out Summons”) and (2) by summons dated April 1, 2020 sought the adjournment of the JPL summons (“Adjournment Summons”).  Id., ¶6.  On April 3, 2020, the action was heard and the Grand Court determined that Campbells did not have standing to proceed further with the petition; leave was granted for the presentation of a substitution application.  Id., ¶7.  By summons dated April 17, 2020 (“Substitution Summons”), STM Group, Inc. applied to be substituted as petitioning creditor in the action.  Id., ¶8.  By order dated July 29, 2021, the petition, JPL summons, and substitution summons were dismissed.  Id., ¶9.  The July 29 order included orders that (1) STM Atlantic shall pay Bronzelink’s costs of and in relation to (a) the JPL summons, (b) the Adjournment Summons, (c) the Strike-Out Summons, and (d) the April 3 hearing, and (2) STM Group shall pay Bronzelink’s costs of and in relation to the Substitution Summons.  Id., ¶10.  On February 8, 2022, the court issued an order entitled, “Costs Certificate” in favor of plaintiff and against STM Group Inc.  Id., ¶11.  The Costs Certificate stated that Bronzelink had lodged a Bill of Costs on October 28, 2021 as against STM Group Inc., which was taxed on the standard basis.  Id., ¶12.  The February 8, 2022 order further provided that the amount payable by STM Group is $187,445.  Id., ¶13.  On February 9, 2022, the court issued an order entitled “Costs Certificate” in favor of plaintiff and against STM Atlantic NV.  Id., ¶14.  The Costs Certificate stated that Bronzelink had lodged a Bill of Costs on October 28, 2021, which was taxed on a standard basis.  Id., ¶15.  The February 9, 2022 order further provided that the amount payable by STM Atlantic N.V. is $83,045.41.  Id., ¶16.  The time to appeal the judgment has lapsed, there is no pending appeal, and no appeal of the judgment was taken by any party in the action.  Id., ¶17.  The judgment is therefore final, conclusive, and enforceable in the Cayman Islands where it was issued.  Plaintiff alleges that the July 29 order is entitled to and must be recognized under the Uniform Foreign-Country Money Judgments Recognition Act, codified at CCP §1713, et seq.

            Defendants explain as background that in 2013, the STM parties founded GIP-Cayman, with its principal place of business in El Segundo, CA.  GIP-Cayman was created by the STM parties as an entity to build and launch a satellite to provide affordable broad band internet service to under-served areas of sub-Saharan Africa.  Robert Gookin decl., ¶3. In May and June 2016, Bronzelink and STM Atlantic and others entered into a Share Purchase Agreement and a Shareholders Agreement, through which Bronzelink agreed to invest up to $250 million in GIP-Cayman, in return for a 75% share of the company and the right to control six seats on the nine-seat board of directors.  Gookin decl., ¶4.  Beginning in May 2017, the relationship between Bronzelink and the STM parties deteriorated over the issue of whether Bronzelink was beneficially owned and controlled by the People’s Republic of China, which the STM parties believed would be a violation of the United States Export Control laws.  Gookin decl., ¶5.  On November 6, 2018, Bronzelink filed a Notice of Arbitration with the HKIAC, naming STM Atlantic and GIP-Cayman as respondents.  Gookin decl., ¶6.  The HKIAC Arbitration was bifurcated between liability and damages.  The hearing on the liability phase took place in January and February 2023.  Gookin decl., ¶8.  During the HKIAC Arbitration hearing, Bronzelink’s counsel in those proceedings (who is not Bronzelink’s counsel in this proceeding) attempted on several occasions to use the pleadings in this action to impugn the credibility of STM Atlantic’s witnesses.  Gookin decl., ¶9.  The dispute between Bronzelink and the STM parties has also resulted in on-going litigation in the Cayman Islands.  Gookin, ¶10.

Defendants argue that good cause exists for the issuance of a protective order.  Defendants explain that plaintiff served written discovery on January 20, 2023.  Defendants contend that the “discovery requests are well-drafted.  But they are extremely broad and implicate issues that are still being litigated in on-going actions in the Cayman Islands and in Hong Kong, where Bronzelink and the STM Parties are adverse.”  Defendants argue that “[g]iven that Bronzelink attempted to use the public filings in this action in an attempt to gain a tactical advantage in the HKIAC Arbitration, it must be precluded from using any confidential information it obtains through discovery to the same end.”  Counsel met and conferred as to stipulating to the Los Angeles Model Stipulation and Protective Order – Confidential Designation Only but plaintiff refuses to enter into a stipulation.

In opposition, plaintiff argues that defendants have not shown good cause because “[t]here is nothing confidential in this statutory action to domesticate a foreign-country money judgment.”  Plaintiff asserts that the issues and discovery requests are exceedingly narrow “to track the statutory language” and that the defenses are enumerated by statute.  See CCP §1716(b)-(d).  Plaintiff also argue that defendants’ “mere desire to limit use of their discovery responses to this action, does not create confidentiality where there otherwise is none.”

In reply, defendants reiterate their argument that there is good cause and that if any of plaintiff’s discovery requests require the STM parties to provide confidential information, that information, and only that information, will be so designated.  Further, the proposed protective order gives plaintiff the ability to challenge a “confidential” designation.

            The court rules as follows:  The court finds that defendants have met their burden of showing good cause and the appropriateness of the court entering a protective order modeled after the superior court’s “Model Stipulation and Protective Order – Confidential Designation Only” to limit the use of defendants’ confidential information in other proceedings.  The court also recognizes that the proposed confidentiality order by its terms permit plaintiff to challenge any confidentiality designations plaintiff deems improper.  “’Parties to civil litigation, recognizing the broad policies favoring discovery, often choose to avoid costly and time-consuming motion practice by entering into stipulations for protective orders that permit production but limit disclosure and use of discovered information deemed by the producing party to contain confidential, proprietary, and/or private information.  They thereby defer or obviate the

need for specific court determination as to the propriety of designating materials confidential

unless and until that designation is challenged.’”  Nativi v. Deutsche Bank National Trust Co. (2014) 223 Cal. App. 4^th 261, 317 (citation omitted).

            The motion is thus GRANTED.

            Defendants are ordered to give notice of ruling.