Judge Kerry Bensinger, Case Number: 23STCV11510, Date: 2025-01-14 Tentative Ruling

Plaintiff Roni Alvandi (Plaintiff) brings this contractual fraud action against Alvand Transportation Corp. (ATC) and Victor Alvandi (Victor) (collectively, Defendants). ATC provides full-service freight and bus fleet management. It is owned and operated by Plaintiff’s father, Victor. As alleged in the complaint, Amtrak requested proposals for a three-year contract in 2022. Because ATC did not know how to price and submit a bid to Amtrak, Victor approached Plaintiff with an offer. Under the terms of the offer, if Plaintiff secured the new contract with Amtrak, Defendants would pay Plaintiff 25% of the projected profits. With Plaintiff’s help, ATC submitted the winning bids to secure the contract with Amtrak. However, Defendants failed to pay Plaintiff 25% of the projected profits.

On July 26, 2024, the parties entered into a Stipulation and Protective Order – Confidential Attorneys Eyes Only (the Protective Order) to streamline the discovery process. As relevant here, the Protective Order states,

“Attorney's Eyes Only Designation. “Attorneys’ Eyes Only” means any information that belongs to a Designating Party who believes in good faith that it contains proprietary or highly sensitive business information, the Disclosure of which is likely to cause significant harm to the business or competitive position of the designating party that cannot be avoided by less restrictive means. The Designating Party shall have the right to designate as “Attorneys’ Eyes Only” only non-public Documents, Testimony or Information that have not been previously disclosed to the other Party or non-Party.”

Plaintiff propounded Requests for Production of Documents on ATC concerning ATC’s financial information. In response, ATC produced its tax returns for 2018, 2022, and 2023, an Amtrak Pricing Schedule, and additional financial documents such as balance sheets and profit and loss statements. ATC designated these documents as Attorney’s Eyes Only (AEO). Plaintiff objected to the AEO designation.[1]

On November 15, 2024, ATC filed this Motion for Protective Order to maintain the AEO designation. ATC seeks to prevent Plaintiff himself from viewing the AEO-designated documents.

“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, … 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.” (Code Civ. Proc., § 2031.060, subd. (b)(5).)

ATC seeks to maintain the AEO designation of its tax returns from 2018-2022, an Amtrak Pricing Schedule, balance sheets and profit and loss statements as AEO. Plaintiff asserts that ATC’s designation is improper.

This case turns on the language of the Protective Order. As relevant here, the Protective Order states,

“Attorney’s Eyes Only Designation. “Attorneys’ Eyes Only” means any information that belongs to a Designating Party who believes in good faith that it contains proprietary or highly sensitive business information, the Disclosure of which is likely to cause significant harm to the business or competitive position of the designating party that cannot be avoided by less restrictive means. The Designating Party shall have the right to designate as “Attorneys’ Eyes Only” only non-public Documents, Testimony or Information that have not been previously disclosed to the other Party or non-Party.”

“Disclose” or “Disclosed” or “Disclosure” means to reveal, divulge, give, or make available Materials, or any part thereof, or any information contained therein.

ATC argues the AEO-designated information is entitled to continued protection from disclosure to Plaintiff himself because Plaintiff, as ATC’s competitor, could use ATC’s sensitive financial information for his own personal gain. In support, ATC explains Plaintiff has already used such information once before when Plaintiff usurped ATC’s attempts to acquire AmericanStar Tours[2] by acquiring AmericanStar Tours for Plaintiff’s personal gain. (Madnick Decl. ¶ 4, Ex. A.) ATC further explains good cause exists to maintain the designation because the information includes: (i) highly sensitive financial, sales, forecasting, pricing, marketing, and client information which would be valuable to competitors and harmful to ATC if disclosed; (ii)

Plaintiff is ATC’s competitor; (iii) the information is available to Plaintiff’s counsel and/or his experts to analyze, just not to Plaintiff himself; and (iv) the information Plaintiff requests was not disclosed to him.

In opposition, Plaintiff raises procedural and substantive challenges to ATC’s motion. He argues (1) ATC did not meet and confer prior to filing this motion, (2) ATC does not satisfy the standard needed for AEO designation, and (3) the documents are improperly designated because they were disclosed to Plaintiff and to non-parties.[3] The court addresses these challenges in turn.

First, the parties discussed the propriety of the AEO designations in email communications. (See Madnick Decl., Exhs. C, D, E.) ATC satisfied its meet and confer obligations prior to the filing of this motion.

Second, Plaintiff argues that ATC must “establish that the documents contain ‘proprietary or highly sensitive business information, the Disclosure of which is likely to cause significant harm to the business or competitive position of the designating party that cannot be avoided by less restrictive means.’” (Opposition, p. 1:19-21.) This is incorrect. As set forth in the Protective Order, an AEO designation is proper if the “Designating Party who believes in good faith that it contains proprietary or highly sensitive business information, the disclosure of which is likely to cause significant harm to the business or competitive position of the designating party that cannot be avoided by less restrictive means.” Further, designation applies only to “non-public Documents, Testimony or Information that have not been previously disclosed to the other Party or non-Party.” Stated another way, ATC need only establish a good faith belief, the non-public nature of the information, and no prior disclosure to Plaintiff or a non-party.

Third, Plaintiff’s disclosure argument is based upon an understanding that disclosure encompasses documents that have not been provided to Plaintiff or non-parties prior to litigation.

ATC argues disclosure means documents disclosed during litigation because Plaintiff’s interpretation would render the AEO designation meaningless.

Plaintiff prevails. The Protective Order states: “The Designating Party shall have the right to designate as “Attorneys’ Eyes Only” only non-public Documents, Testimony or Information that have not been previously disclosed to the other Party or non-Party.” (Protective Order, ¶ 9, emphasis added.) “ ‘Disclose’ or ‘Disclosed’ or ‘Disclosure’ means to reveal, divulge, give, or make available Materials, or any part thereof, or any information contained therein.” (Protective Order, ¶ 1(f).) The plain language of the Protective Order does not contain any limitation on when the disclosure was made and thus encompasses information that was disclosed prior to the litigation.

Plaintiff’s interpretation is also well-founded. In support, Plaintiff submits a redline of the Protective Order which includes the “previously disclosed” language to the Protective Order which was not present in a prior draft. (Shaumyan Decl., Exh. 1.) Plaintiff’s counsel further attests that the parties negotiated this language to ensure only non-public documents that Alvand had not previously provided to Plaintiff or non-parties could be marked as Attorneys’ Eyes Only. (Shaumyan Decl., ¶ 2.) ATC does not dispute that the language was negotiated for this specific purpose.

The court finds the AEO designation should not be maintained. The parties appear to agree that Plaintiff viewed or helped produce the challenged documents during his consultation with ATC. The AEO-designated documents were therefore disclosed to Plaintiff within the meaning of the Protective Order. ATC does not submit any evidence identifying which, if any, documents were not disclosed previously to Plaintiff.

Kerry Bensinger

Judge of the Superior Court

[1] According to the notice of motion, ATC seeks only to maintain the AEO designation of its tax returns from 2018-2022. However, given that the parties also spar over the AEO designation as to the pricing schedule and other financial documents, the court addresses the propriety of the AEO designation to those documents as well.

[2] The parties do not explain who or what AmericanStar Tours is.

[3] Plaintiff also argues there is no proof ATC was in negotiations to acquire AmericanStar Tours at the time Plaintiff acquired it. This tends to cut against an AEO designation based on Plaintiff’s alleged status as ATC’s competitor.