Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

Petitioner William Wismann is an inventor with significant experience developing technologies in various industries, including in petroleum and chemistry.  Following the Exxon Valdez oil spill in 1989, Wismann invented the first version of a class of technologies now referred to as Polar Selective Agents (“PSAs”).  

Later, Wismann, along with fellow inventor and collaborator Dr. David Martin (“Martin”), further developed the PSA technologies to, among many other applications, separate hydrocarbons from tar sands and other materials.  Today, the PSA technologies serve as the foundation for the novel trade-secret Oil Separation Technology (“OST”), which allows oil to be cleaned and reclaimed from pipelines and storage containers during the exploration, drilling, and refinement process to minimize the environmental impact.   

Petitioner Wismann Group LLC (“WG”), along with Tivoli Realty Inc. and Slingshot People, LLC, formed Genesis, a limited liability company, to serve as a special purpose vehicle (“SPV”) to commercialize the OST.  The parties’ agreement to form the Genesis SPV was memorialized in an Oil Field and Pipeline Cleaning Services Contract (“the Contract”).  (Ex. A to Verified Petition.)  The Contract included an agreement that the parties would negotiate in good faith towards licensing the OST for use in oil field services and pipeline cleaning within the United States.  But the Contract did not extend a license for the OST.  Following the execution of the Contract, the parties spent much of 2020 attempting to negotiate a license for the OST, but those negotiations failed in mid-2020.   

On November 2, 2020, Genesis, Tivoli, and Slingshot filed a complaint in the Central District of California (the “Underlying Action”) against WG and Wismann asserting several claims, including claims for trade-secret misappropriation in violation of the Defend Trade Secrets Act of 2016.  (Ex. B to Verified Petition.)  These trade-secret claims were predicated on the allegation that the Contract gave Genesis a global, exclusive license to the OST (and therefore exclusive rights to the trade secrets in the OST).  

Genesis subsequently filed an Ex Parte Application for a Temporary Restraining Order against WG and Wismann based on its trade-secret misappropriation claim. The court denied the TRO, but later granted Genesis’s request for a preliminary injunction, relying on sworn declarations from Genesis’ managers, Jimmy Smith, Susan Adelman, and Egypt McKee – all of whom stated that Genesis had an exclusive license to the OST. The injunction crippled WG’s business for over a year by preventing it from using its most valuable intellectual property.  

Later, in their depositions, Smith, Adelman, and McKee all admitted Genesis had not entered into any licensing agreement for the OST.  (Exs. F, G, H, I to Verified Petition.)  In other words, they effectively admitted the declarations on which Genesis had relied to obtain the preliminary injunction were false.  WG and Wismann then moved to dissolve the preliminary injunction.  Genesis (doubling down on its assertion that the license did exist) moved for partial summary judgment.   

On March 20, 2023, the federal court – after looking at the deposition transcripts -- dismissed Plaintiffs’ trade-secret claim sua sponte, holding “[t]he Court not only finds that Plaintiffs have failed to demonstrate that they are entitled to summary judgment on the element of ownership, but also that there is no basis in the record upon which a factfinder could conclude that Genesis owns the OST for the purposes of its DTSA claim.” (Genesis 1 Oil Servs. LLC v. Wismann Grp., LLC, Case No. 8:20-cv-02114-SSS-ADSx, 2023 WL 3040584, at *4 (C.D. Cal. Mar. 20, 2023).) The court also dissolved the preliminary injunction, finding that Genesis could not succeed on the merits of its claim for trade-secret misappropriation because, again, its principals had all admitted that Genesis never had a license to the OST.  

On appeal, the Ninth Circuit affirmed the district court’s rulings completely, finding “Genesis did not raise a material factual dispute regarding its possession of a trade secret under the contract, and the district court properly dissolved the preliminary injunction because Genesis was not likely to succeed on the merits of its trade secrets misappropriation claim. … For the same reason, the district court properly granted summary judgment in favor of WG on the trade secrets claim.”  (Genesis 1 Oil Servs. LLC v. Wismann Grp., LLC, No. 23-55060, 2024 WL 385655, at *1 (9th Cir. Feb. 1, 2024).)  

Although the trade-secret claim has been fully resolved (including any appeal), Genesis’ claim for breach of the Contract and Petitioners’ counterclaims remain pending in the Underlying Action.  As a result, Petitioners cannot yet file a malicious prosecution claim against Genesis – because it is black letter law that a plaintiff cannot file a malicious prosecution action until it has obtained a final judgment in the underlying action and all appeals have been exhausted.  Put differently, although Petitioners have obtained a final, fully-appealed ruling in their favor on the trade-secret claim, they cannot pursue a malicious prosecution action (even as to that claim) until after (1) the rest of the action is resolved and (2) all appeals have been exhausted.  

This hearing is on Petitioners’ motion for order for pre-commencement discovery.   

Petitioners argue they need pre-commencement discovery to depose Smith, Adelman, and McKee so that they can determine exactly when they knew or should have known that their declarations were inaccurate and preserve the testimony in case their elderly memories fade further or they become unavailable.   

LEGAL STANDARD 

One who expects to be a party, whether a plaintiff or defendant, to a cognizable action in a Court of this State may obtain discovery “for the purpose of perpetuating that person’s own testimony or that of another natural person or organization, or of preserving evidence for use in the event an action is subsequently filed.” (Code Civ. Proc., § 2035.010, subd. (a).)  Discovery methods available in these cases include oral and written depositions, inspection of documents, things, and places, and physical and mental examinations. (Code Civ. Proc., § 2035.020.)¿¿¿ 

A petition under this chapter must be verified and filed in the superior court of the county where at least one adverse party resides. (Code Civ. Proc., § 2035.030, subd. (a).) (Emphasis added.)¿ The petition must also include all of the following (1) the expectation that the petitioner will be a party to an action cognizable in this state; (2) petitioner’s present inability either to bring that action or to cause it to be brought; (3) the subject matter of the expected action and the petitioner’s involvement and must attach a copy of any written instrument connected to the litigation; (4) the particular methods the petition seeks to employ; (5) the facts the petitioner wishes to establish by engaging in discovery under this section; (6) the reasons for desiring to perpetuate testimony or preserve evidence before an action has been filed; (7) the name or description of those the petitioner expects to be adverse parties; (8) the name and address of those from whom discovery is sought; and (9) the substance of the information expected to be elicited from each of those from whom discovery is sought. (Code Civ. Proc., § 2035.030, subd. (b).)¿¿¿ 

Service of this petition must be made in the same manner as service of summons on each person named in the petition as an expected adverse party. (Code Civ. Proc., § 2035.040, subd. (a).)¿¿ 

“If the Court determines that all of part of the discovery requested under this chapter may prevent a failure or delay of justice, it shall make an order authorizing that discovery.” (Code Civ. Proc., § 2035.050, subd. (a).) “The order shall identify any witnesses whose deposition may be taken, and any documents, things, or places that may be inspected, and any person whose physical or mental condition may be examined.” (Code Civ. Proc., § 2035.050, subd. (b).)¿¿¿¿ 

REQUEST FOR JUDICIAL NOTICE 

Petitioner requests judicial notice of the following documents: