Judge: Robert B. Broadbelt, Case: 19STCV42195, Date: 2022-08-01 Tentative Ruling

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Case Number: 19STCV42195    Hearing Date: August 1, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Defendant Dave, Inc.  

RESPONDING PARTY:       Plaintiff Zachary Martinsek  

Motion for Protective Order

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Defendant Dave, Inc. (“Defendant”) moves the court for a protective order barring plaintiff Zachary Martinsek (“Plaintiff”) from propounding discovery on nonparties seeking documents or information that is available from public sources or from Defendant, and from seeking documents that contain or reflect confidential or trade secret information belonging to those non-parties.  Defendant further requests, “[t]o the extent Plaintiff has served such subpoenas,” that they be quashed.  (Notice, p. 1:9.)  Defendant makes its motion as to 11 subpoenas served by Plaintiff to nonparty entities or individuals which have made an investment in Defendant.  (Michaelson Decl., ¶ 2; Michaelson Decl., Ex. 1 [Deposition Subpoena served on Norwest Venture Partners].) 

The court finds that Defendant has met its burden to show good cause for a protective order exists on the ground of overbreadth and therefore grants Defendant’s motion in part.  (Code Civ. Proc., § 2025.420, subd. (b).)

First, although Defendant contends that the documents sought by Plaintiff may be more easily obtained from Defendant, Plaintiff is permitted to obtain discovery from a person who is not a party to the action.  (Code Civ. Proc., § 2020.010, subd. (b).)  The court therefore denies Defendant’s motion for a protective order on the ground that Plaintiff has sought information from nonparties which is also in Defendant’s possession and/or publicly available.

Second, as to the request information allegedly constituting trade secrets, the court finds that Defendant has failed (1) to establish that it may assert this privilege and (2) to produce evidence to establish that trade secrets are being sought.  First, “the owner of a trade secret has a privilege to refuse to disclose the secret, and to prevent another from disclosing it, if the allowance of the privilege will not tend to conceal fraud or otherwise work injustice.”  (Evid. Code, § 1060.)  Defendant does not assert that its trade secrets are being sought.  Rather, Defendant contends that the subpoenas request “documents that actually or potentially memorialize or reflect the third party’s…trade secret information….”  (Michaelson Decl., ¶ 4 [emphasis added].)  Defendant does not have standing to assert this privilege because it is not the holder of the alleged trade secrets.  Second, even if Defendant could assert this privilege, Defendant has failed to provide competent evidence to establish foundational facts to support a finding that trade secrets of each of the 11 subpoenaed entities are sought by Plaintiff’s subpoenas.  Defense counsel’s declaration does not provide facts establishing that the requested information that (1) derives 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) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.  (Civ. Code § 3426.1, subd. (d).)  The court therefore denies Defendant’s request for a protective order on the ground that Plaintiff’s subpoenas improperly request protected trade secret information of third party investors.

Third, the court finds that Plaintiff’s subpoenas are overbroad as to time.  The court recognizes that Plaintiff requests “all” documents within each category of requested documents.  (Michaelson Decl., Ex. 1; Michaelson Decl., ¶ 3 [stating that the attached subpoena directed to all other investors “contains identical requests for documents”].)  The court finds that these requests are limited to agreements and information related to or between the subpoenaed party and Defendant and therefore are limited in scope.

However, the court finds that the subpoenas—seeking information for the preceding 10 years—are overbroad as to time and therefore request documents that are neither relevant to the subject of the action nor reasonably calculated to lead to the discovery of admissible evidence.  (Code Civ. Proc., § 2017.010.)  In opposition, Plaintiff explains that he has served the subpoenas on Defendant’s investors “to determine whether Plaintiff’s shares were diluted or increased, the reported value of the shares during each financing round, and what information if any was disclosed about Plaintiff’s contributions and departure as a co-founder to the various investors.”  (Opp., p. 3:17-19.)  Plaintiff alleges that he began working with defendant Jason Wilk to develop materials for Defendant in May of 2015, and that Defendant breached the subject stock option agreement on December 13, 2017.  (FAC ¶¶ 11, 18.)  The information sought—requesting the production of documents within the last 10 years—is overbroad since it predates Plaintiff’s employment with Defendant. 

The court therefore finds that Defendant has shown good cause to issue a protective order.   The court issues a protective order limiting the time period as to the requested documents to the period from January 1, 2015 (the year in which Plaintiff has alleged to have started working with defendant Jason Wilk to develop materials for Defendant) to the date of the subpoena. 

ORDER

The court denies in part and grants in part defendant Dave, Inc.’s Motion for Protective Order.  The court grants defendant Dave, Inc.’s Motion for Protective Order on the ground that the subpoenas are overbroad as to time.  (Code Civ. Proc., § 2025.420.)

The court orders that the requests for documents and information in the deposition subpoenas for production of business records served by Plaintiff on the following entities are limited to the time period from January 15, 2015 to the date the deposition subpoena was issued:  Investors Victory Park Capital Investors, LLC, The Chernin Group, LLC, SV Angel, Jason Rubin, Charles S. Paul, Quincy Smith, VPC Impact Acquisition Holdings III, Inc., Section 32, LLC, Justin Yoshimura, Northwest Venture Partners, and CE Innovation Capital. 

The court denies all other relief requested in defendant Dave, Inc.’s Motion for Protective Order

            The court orders defendant Dave, Inc. to give notice of this order. 

IT IS SO ORDERED.

DATED:  August 1, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court