Judge Lynne M. Hobbs, Case Number: 22STCV35699, Date: 2024-03-28 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 22STCV35699, Date: 2024-03-28 Tentative Ruling

Case Number: 22STCV35699 Hearing Date: March 28, 2024 Dept: 30

JULIE ALLEN, et al. vs LOWE'S COMPANIES, INC., et al.

TENTATIVE

Defendant’s motion for a protective order is GRANTED. Moving party to give notice.

Legal Standard

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.” C.C.P. §2031.060(a).

“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.” C.C.P. §2031.060(b).

CCP § 2025.420(a) states that “Before, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order. The motion shall be accompanied by a meet and confer declaration under Section 2016.040.” The issuance and formulation of protective orders are to a large extent discretionary. (See Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.)

In the context of a protective order to restrict dissemination of documents containing trade secrets in a civil action, Evidence Code sections 1060 and 1061 apply. (Stadish v. Super. Ct. (1999) 71 Cal.App.4th 1130, 1144-1145.) Thus, a party seeking a protective order must submit an affidavit based on personal knowledge listing the affiant’s qualifications to give an opinion, identifying the alleged trade secret, identifying documents disclosing the trade secret, and presenting evidence that the secret qualifies as a trade secret. (Evid. Code § 1061, subd. (b)(1).)

Under section 1061, subdivision (a)(1), “trade secret” means “trade secret,” as defined in section 3426.1, subdivision (d) of the Civil Code. Thus, “trade secret” means “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) [d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Discussion

Defendant seeks a Protective Order preventing the dissemination of material designated “confidential” and delaying the depositions of Lowe’s Person Most Knowledgeable and Lowe’s employees, who may be questioned about the confidential information, until after the Motion for Protective Order is ruled on by the Court and the Protective Order is in place.

Plaintiffs have propounded discovery seeking information and documents pertaining to Defendant’s display and procedures regarding how their merchandise is placed within the display -- information which Lowe’s considers confidential, commercially sensitive and/or proprietary in nature. The stipulated order proposed by Defendant is in all material aspects identical to, and based on, a model protective order developed by the Los Angeles County Superior Court and regularly in use in this court and many others for years.

After numerous meet and confer efforts, the parties have not been able to agree on whether a protective order is warranted here. (Rivera Decl., Exhs. A-I.)

Defendant has complied with Evidence Code §1061(b) and established good cause for issuance of a protective order. Defendant has submitted a declaration from Veronica January in support of the motion for a protective order. January is a store manager who has been employed by Lowe’s for 24 years, and has been a store manager for 19 years. (January Decl., ¶ 1.)

Lowe’s is a retailer in the home improvement industry and has conducted business in California since 1998. The home improvement retail industry is very competitive. Toward that end, Lowe’s has developed, through considerable effort, policies and procedures which allow Lowe’s to (1) maintain the security and accessibility of its merchandise, (2) ensure the safety of its customers and employees, including in their acquisition and loading of its merchandise, (3) effectively minimize and resolve liability claims and (4) offer quality service to its customers. (Id., ¶ 2.)

The documents in question for this motion are: (1) “CLOSET WIRE ORGANIZATION 16240371 v003;” (2) “Conduct Lowe’s Safe Review;” (3)”LSR,” dated November 15, 2020; (4) “Perform Zone Recovery;” (4) “Racking Inspections and Damage Policy;” (5) “Securing Vertically Stored Merchandise;” (6) “Storage Requirements for Specific Items;” (7) “Vertically Stored Merchandise Policy;” (8) “Zone Recovery Checklist: Home De´cor;” and (9) “September 2020 Racking Inspection.” Lowe’s derives economic value from maintaining the secrecy of its Confidential Documents, oral statements of similar policies and procedures, as well as others that Plaintiffs may subsequently demand in discovery. If disclosed to the public, the trade secret information contained in these confidential documents would reveal Lowe’s internal operations and could potentially be used by competitors as a means to compete for its customers, interfere with its business plans and thereby gain unfair business advantages. Unrestricted or unprotected disclosure of such information would result in prejudice and harm to Lowe’s by revealing competitive confidential information which has been developed at the expense of Lowe’s and which represents valuable tangible and intangible assets. (January Decl., ¶ 3.)

The Lowe’s policy document titled “CLOSET WIRE ORGANIZATION 16240371 v003” sets forth Lowe’s policies and details regarding how to construct and arrange its displays of closet organization products to maximize efficiency and to maintain the security and accessibility of its merchandise. (Id., ¶ 4.)

The Lowe’s policy document titled “Conduct Lowe’s Safe Review” addresses Lowe’s policy regarding a daily inspection called Lowe’s Safe Review (LSR) which ensures the safety of Lowe’s employees, customers, vendors, and property. (Id., ¶ 5.)

The Lowe’s policy document titled “LSR,” dated November 15, 2020 is the Lowe’s Safe Review which documents the daily safety inspection and includes safety inspection questions and whether the Home Fashion/Storage/Cleaning department was compliant on November 5, 2020. (Id., ¶ 6.)

The Lowe’s policy document titled “Perform Zone Recovery” contains information on the policy regarding straightening, stocking, and labeling of the store’s merchandise, as well as inspecting displays for damage. (Id., ¶ 7.)

The Lowe’s policy document titled “Zone Recovery Checklist: Home De´cor” contains a checklist of tasks that the closing associate needs to perform in the Home De´cor department every day prior to leaving. (Id., ¶ 8).

The Lowe’s policy document titled “Racking Inspections and Damage Policy” addresses Lowe’s policies regarding inspecting racking inside the store to maintain a safe shopping and working environment for customers and employees. (Id., ¶ 9.)

The Lowe’s policy document titled “Securing Vertically Stored Merchandise” provides extensive instructions for the safe storage and display of products that stand at least four feet tall. The policies contained in this document are intended to assist in providing a safer working and shopping environment through the standardization of securing vertically stored merchandise. (Id., ¶ 10.)

The Lowe’s policy document titled “Storage Requirements for Specific Items” details Lowe’s policy regarding the special precautions and guidelines that must be followed when displaying, stocking, and placing certain items in top stock to ensure a safe and visually pleasing shopping experience for customers and working environment for Lowe’s employees. (Id., ¶ 11.)

The Lowe’s policy document titled “Vertically Stored Merchandise Policy” details Lowe’s policy regarding the special precautions and guidelines that must be followed when storing vertically stored merchandise. (Id., ¶ 12.)

The Lowe’s policy document titled September 2020 Racking Inspection” details the questions and areas of inspection for the periodic comprehensive racking inspection at the store and whether the sales floor at the subject store was compliant in September 2020. (Id., ¶ 13).

Plaintiff argues Defendant has failed to meet its burden of showing that the information at issue is subject to trade secret. Plaintiff argues that instead, Defendant’s motion contains conclusory, boilerplate language regarding trade secrets without a showing of what specifically is at risk by producing documents relating to a display that is open for the public to see on the sales floor of the subject Lowes store. Plaintiff argues Defendant fails to identify specifically what information is confidential, how this information if valuable to Defendant, and that other organizations cannot ascertain this information publicly.

However, Defendant has explained that if these documents are disclosed, Lowe’s competitors will learn, for example, specific information developed by Lowe’s regarding its policies and procedures. They could in turn use that information to modify their policies and procedures to boost their efficiency, thereby harming Lowe’s competitive advantage. The policies and procedures Lowe’s has put in place, reflected in those documents, and taught to its employees, are the product of careful work aimed at promoting safety and efficiency in undertaking store operations. Plaintiff argues that the displays are open for the public to view, yet seeks these documents in litigation. If the methods or techniques used for Lowe’s displays were so obvious and open to the public, Plaintiff would not need to seek them in discovery.

Based on the foregoing, Defendant’s motion for a protective order is GRANTED.