Judge: Joel L. Lofton, Case: 22AHCV00005, Date: 2022-08-04 Tentative Ruling

Case Number: 22AHCV00005    Hearing Date: August 4, 2022    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     August 4, 2022                                   TRIAL DATE:  No date set.

CASE:                         TIAN YOU FENG, LLC a California limited liability company; LI LIU, an individual, v. LUCKY STAR KITCHEN, INC., a California corporation; JUN SHAO, an individual; and DOES 1 through 50, inclusive.

CASE NO.:                 22AHCV00005

MOTION TO QUASH SUBPOENAS

MOVING PARTY:              Defendants Lucky Star Kitchen, Inc. and Jun Shao

RESPONDING PARTY:     Plaintiffs Tian You Feng, LLC and Li Liu

SERVICE:                             Filed June 20, 2022

OPPOSITION:                      Filed July 21, 2022

REPLY:                                  Filed July 28, 2022

RELIEF REQUESTED

            Defendants Lucky Star Kitchen, Inc. and Jun Shao request an order quashing subpoenas for the production of documents issued in this case.

            Defendants also request an award of expenses incurred in the amount of $3,130.

BACKGROUND

            This case arises out of Plaintiffs Tian You Feng, LLC (“Tian You Feng”) and Li Liu’s (“Liu”) (collectively “Plaintiffs”) claims that Defendants Lucky Star Kitchen, Inc. (“Lucky Star Kitchen”) and Jun Shao (“Shao”) (collectively “Defendants”) improperly terminated Liu as Chief Financial Officer and wrongfully used the licensed “Ma Lu Bian Bian” (“MLBB”) name. Plaintiffs assert that only Tian You Feng and Liu had the contractual right to use the MLBB name under a license agreement. Plaintiffs also assert that MLBB previously provided the signature broth to Plaintiffs. Plaintiffs assert that Defendants used other broths while falsely marketing their food as authentic MLBB soup.

            Plaintiff filed this complaint on January 4, 2022, alleging seven causes of action for (1) false advertising in violation of Business and Professions Code section 17500; (2) unfair competition in violation of California Business and Professions Code section 17200; intentional interference with prospective business advantage; (4) trademark dilution in violation of Business and Professions Code section 14247; (5) common law unfair competition; (6) accounting; (7) unjust enrichment. 

TENTATIVE RULING

            Defendants’ motion to quash the subpoenas is GRANTED.

            Plaintiffs’ subpoenas for Lucky Star Kitchen’s tax returns and bank records are quashed in their entirety.

            Plaintiffs’ subpoenas for Jun Shao’s personal financial records are to be discussed at the hearing.

            Defendants’ request for expenses is DENIED.

LEGAL STANDARD

            Code of Civil Procedure section1987.1, subdivision (a), provides: “If a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.”

DISCUSSION

            Defendants provide that on June 8, 2022, Plaintiff’s counsel served deposition subpoenas on Bank of America, N.A., CTBC Bank Corp. (USA), P B Tax & Business Service Inc., and East West Bank for the production of personal financial records of June Shao and business records of Lucky Star Kitchen. (Zhou Decl. ¶ 3.) Defendants provide that the subpoenas sought an identical list of documents. (Id. ¶ 4.) Defendants also provide that the list of documents are served on the same entities and are also identical to the documents sought via subpoena in the related case Lucky Star Kitchen, Inc. v. Li Liu, 20GDCV00650, where discovery has been cut off. (Id. ¶ 5.)

            Defendant also asserts that the subpoenas are irrelevant, overbroad, privileged, and are a violation of Defendants’ privacy.

            Subpoenas as to Lucky Star Kitchen

            On July 19, 2022, this Court granted Liu’s request to compel discovery responses from Lucky Star Kitchen in the related case, Lucky Star Kitchen, Inc. v. Li Liu, 20GDCV00650. Lucky Star Kitchen was ordered to provide bank records from CTBC, Bank of America, and East West Bank for 2020 and 2021 and tax returns for 2020 and 2021. Further, Lucky Star Kitchen indicates that it will comply with the court order and produce the documents and that therefore the subpoenas in the present case are unnecessary.

            The Court agrees that any further subpoenas regarding Lucky Start Kitchen’s bank records and tax returns would be unnecessarily duplicative.

            Defendants’ motion to quash the subpoenas for the financial records of Lucky Star Kitchen is granted. The subpoenas are ordered to be quashed in their entirety.

            Subpoenas as to Jun Shao

            Next, Defendants assert that the subpoenas for the personal financial records of Jun Shao are a violation of Shao’s privacy.

The California Constitution provides Californians with a right to privacy. (Cal. Const., art. 1, section 1.) The California Supreme Court has held that “[t]he party asserting a privacy right must establish a legally protected privacy interest, an objectively reasonable expectation of privacy in the given circumstances, and a threatened intrusion that is serious.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 552 (“Williams”), citing Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 35.) “The party seeking information may raise in response whatever legitimate and important countervailing interests disclosure serves, while the party seeking protection may identify feasible alternatives that serve the same interests or protective measures that would diminish the loss of privacy. A court must then balance these competing considerations.” (Ibid.)

            “The Hill test, conceived in the context of a pleaded cause of action for invasion of privacy, has been applied more broadly, including to circumstances where litigation requires a court to reconcile asserted privacy interests with competing claims for access to third party contact information.” (Williams, supra, 3 Cal.5th at p. 552.)

            Here, Shao argues that her financial records are protected by her privacy rights. The California Supreme Court in Williams recognizes that financial data is considered private and more sensitive than home contact information. (Williams, supra, 3 Cal.5th at p. 554.) Shao also argues, despite Plaintiffs’ claims that Shao took corporate funds, that any funds paid to her by Lucky Star Kitchen were for her salary or reimbursement. Further, Shao asserts that Plaintiffs seek access to a wide range of her personal finances instead of identifying any means to narrow the scope of the discovery sought.

            The Court agrees with Shao has asserted a valid privacy right in her personal financial records, a reasonable expectation of privacy in this context, and a serious, threatened intrusion. Plaintiffs’ discovery requests seek to obtain large swathes of Shao’s personal financial records from a tax services provider and three separate banks without identifying any countervailing interests. Plaintiffs simply argue, without any supporting evidence, that “Defendant Shao has admitted to taking corporate funds, including profits, and writing checks to herself. These checks from Lucky Star Kitchen, Inc. to Shao, or to cash, have already been produced by these parties in the related case. Thus. Shao has waived any claim of privacy.” (Opposition at p. 4:4-6.)

            At the hearing, Plaintiffs have the burden of establishing any countervailing interest in requiring Shao to disclose her financial records. Shao, on the other hand, may identify feasible alternatives.

            Expenses Incurred

            Defendants also seek sanctions in the amount of $3,310 for ten hours of work at a rate of $325.00 an hour plus a filing fee of $60.

“Except as specified in subdivision (c), in making an order pursuant to motion made under subdivision (c) of Section 1987 or under Section 1987.1, the court may in its discretion award the amount of the reasonable expenses incurred in making or opposing the motion, including reasonable attorney’s fees, if the court finds the motion was made or opposed in bad faith or without substantial justification or that one or more of the requirements of the subpoena was oppressive.” (Code Civ. Proc. section 1987.2, subd. (a).)

The Court recognizes that Plaintiffs are seeking identical documents as the related case as well as seeking personal financial records of Shao. However, the Court denies Defendants’ request for sanctions but warns Plaintiffs that any further action that constitutes a violation of the discovery process will result in sanctions .

CONCLUSION

            Defendants’ motion to quash the subpoenas is granted.

            Plaintiffs’ subpoenas for Lucky Star Kitchen’s tax returns and bank records are quashed in their entirety.

            Plaintiffs’ subpoenas for Jun Shao’s personal financial records are to be discussed at the hearing.

            Defendants’ request for expenses is denied.

Dated:   August 4, 2022                                  ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court