Judge: Kevin C. Brazile, Case: BC623542, Date: 2023-02-28 Tentative Ruling

Hearing Date: February 28, 2023

Case Name: Digital Dolphin Supplies, LLC v. Cotton, et al.

Case No.: 21STCV00223

Matter: Motion to Compel Compliance with Subpoena

Moving Party: Defendants Justin Cotton and Quire Office Products LLC

Responding Party: Plaintiff Digital Dolphin Products, LLC

Notice: OK

Ruling: The Motion is granted.  

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On January 5, 2021, Plaintiff Digital Dolphin Products, LLC filed the operative Complaint against Defendants Justin Cotton and Quire Office Products LLC for (1) breach of fiduciary duty, (2) misappropriation of trade secrets, (3) breach of contract, (4) interference with contractual relations, and (5) interference with prospective economic advantage.  Plaintiff alleges that Defendants stole Plaintiff’s trade secrets and created a competing business while still employed by Plaintiff. 

On April 15, 2022, Justin Cotton and Quire Office Products LLC, individually and on behalf of others similarly situated, filed a Second Amended Cross-Complaint (“SACC”) against Digital Dolphin Products, LLC, a California LLC, and Digital Dolphin Products, LLC, a Nevada LLC, for (1) violation of Bus. & Prof. Code § 17200, (2) declaratory relief, (3) breach of contract, (4) violation of Penal Code § 496, (5) fraud, (6) fraudulent concealment, and (7) nonpayment of wages.  Among other things, Cross-Complainants allege that the Digital Dolphin entities fraudulently underpaid commissions on sales of personal protective equipment (“PPE”).  

Defendants Justin Cotton and Quire Office Products LLC now seek an order compelling non-party Eric Alden Accountancy Corporation to comply with Defendants’ business record subpoena.  Defendants seek “Digital Dolphin (California)’s profit and loss statements for 2019, 2020, 2021, and 2022 and Digital Dolphin (Nevada)’s profit and loss statements for 2021 and 2022.”  (Reply at p. 3.)

Plaintiff has filed an affidavit of compliance as follows: “Plaintiff Digital Dolphin previously produced a P&L Statement for 2021 and an Income Statement and Profit and Loss Statement for 2019-2020. Defendants requested a P&L Statement for 2020 and Digital Dolphin obtained and produced same. Digital Dolphin has produced all of the P&L statements Eric Alden Accountancy Corporation subject to the subpoena. Defendants objected to the designation of the P&L Statements as Attorneys Eyes Only Highly Confidential. After meeting and conferring, Digital Dolphin agrees to produce the P&L Statements as Highly Confidential.”

In Reply, Defendants indicate that “Digital Dolphin produced only its internal profit and loss statements for the California entity for the years 2020 and 2021. . . . . Nobody produced any California entity statements for 2019 or 2022. [ ] And nobody produced any Nevada entity statements.”

Defendants are permitted to request similar or identical documents from non-parties.  The only apparent issue is a protective order as there seems to be a willingness to produce documents.  The Motion to Compel Compliance is granted.  Documents are to be produced by the non-party accountant within thirty days.  The production shall be subject to a protective order.  Whether the protective order will make a distinction for highly confidential designations shall be discussed at the Motion hearing, as no briefing was provided on that issue.  Generally, highly confidential designations are primarily for documents containing trade secrets.  

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.