Judge Stephen I. Goorvitch, Case 21STCV13314 2022-09-30 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 21STCV13314, Date: 2022-09-30 Tentative Ruling

Case Number: 21STCV13314 Hearing Date: September 30, 2022 Dept: 39

Cannaco Research Corporation v. Shauneen Militello

Case No. 21STCV13314

Defendant’s Ex Parte Application

On September 6, 2022, the Court issued a minute order stating in relevant part: “[T]he Court orders that all discovery that may be responsive to RPD #1 shall be preserved and shall not to be altered, deleted, or destroyed. This order applies to the parties, as well as their counsel and Orbital Consulting.” (See Court’s Minute Order #2, dated September 6, 2022.) Now, Shauneen Militello seeks the following and the Court orders as follows:

1. “[A]n order clarifying Orbital’s authority and obligation to preserve evidence stored in the G-Suite for which it holds Super Admin privileges”

The Court previously ordered Orbital Consulting and the parties to preserve “all discovery that may be responsive to RPD #1,” which includes “[a]ll documents evidencing any activity on the G-Suite . . . from September 3, 2020, through the present.” As the Court previously stated, this RPD arguably includes every document on the G-Suite platform. Therefore, absent good cause, the Court’s order shall be interpreted as requiring preservation of every document on the G-Suite platform from September 3, 2020, through the date of RPD #1 (December 22, 2021).

Orbital Consulting preserved G-Chat communications in May 2021. With respect to Orbital Consulting, the Court’s order states: “Orbital Consulting is not required to preserve these files again.” (See Court’s Minute Order #2, dated September 6, 2022.) The Court intended its order to require Orbital Consulting to preserve any documents that it downloaded from the G-Suite, i.e., documents on its server. However, the Court did not intend to require Orbital Consulting to download additional documents for preservation purposes.

2. “[A]n order requiring Orbital to produce records necessary to demonstrate that certain communications stored in the G-Suite . . . have been deleted by Cannaco”

The Court stayed this case subject to two exceptions of relevance: (1) Plaintiff’s counsel may bring any noticed motion to modify or enforce any prior order issued in this case, including the preliminary injunction or any of the Court’s orders relating to Orbital Consulting’s work; and (2) Either party may bring any ex parte application or noticed motion necessary to prevent the alteration or destruction of evidence, e.g., orders necessary to preserve the status quo. (See Court’s Minute Order #1, September 6, 2022.)

As an initial matter, the Court modifies this order to make clear that either party may bring a noticed motion to modify or enforce any prior order. The Court inadvertently limited this relief to Plaintiff’s counsel simply because Plaintiff’s counsel, and not Defendant, had raised the possibility of seeking such relief. Regardless, this exception shall apply equally to both parties.

That having been said, the Court denies Militello’s request. In its order, the Court stated: “The Court also will entertain a noticed motion to produce updated files consistent with the Court’s prior order if updated discovery is relevant to one of the exceptions to the stay.” (Court’s Minute Order #2, dated September 6, 2022.) The Court denies the relief sought by Militello because, first, the Court stated that this relief must be sought by way of “a noticed motion,” and, second, the Court required the parties to meet-and-confer before any such relief is sought. More important, however, the Court did not intend this exception to constitute an alternative means of discovery. Rather, the Court intended this exception to apply narrowly, i.e., “if there is good cause to believe that either party has violated the preliminary injunction, and the evidence is necessary to enforce the preliminary injunction and seek a remedy . . . .” (Ibid.)

In an effort to clarify its prior order, the Court modifies it as follows: The Court will not entertain any discovery motions relating to alleged violations of the preliminary injunction or the Court’s preservation orders unless there is a noticed motion seeking a finding of contempt or other sanctions, and the motion establishes a probability of success on the merits or other good cause to permit discovery in support of the motion. Any such motions require a meet-and-confer between the parties.

The Court previously admonished Militello to follow court orders, and the Court does so again with respect to the requirement to meet-and-confer before relief is sought. The Court sustains Plaintiff’s objections to the communications upon which Militello relies, as they are inadmissible under Evidence Code section 1152. The alleged statements at issue were “connected” to the parties’ effort to settle their dispute, bringing them within the purview of Evidence Code section 1152. (See Caira v. Offner (2005) 126 Cal.App.4th 12, 34-35.) Moreover, any ambiguity must be resolved in favor of Defendant, as there is a “strong policy in favor of candor during settlement negotiations embodied in the statute.” (Id., p. 35.)

3. “[A]n order to prevent further destruction of evidence following Orbital’s migration of Cannaco’s accounts out of the G-Suite”

The Court believes that its order is sufficient to ensure that evidence is preserved, as Plaintiff’s counsel and Ms. Athey Lawrence are members of the California Bar in good standing, and the Court can impose an evidentiary or terminating sanction for any violation of its orders. The Court would consider issuing an order requiring Orbital Consulting to update its preservation of the G-Suite on the following conditions: (1) Militello would pay all fees associated with Orbital Consulting’s work, including the storage of the files; (2) The Court would order Orbital Consulting to update its production to Plaintiff’s counsel based on the new files, i.e., Plaintiff’s counsel would receive updated logs, per the Court’s prior discovery order; and (3) No party may access to the data except through the discovery process.

4. Sanctions

Plaintiff’s counsel seeks sanctions in connection with this ex parte application. The Court does not impose sanctions by way of ex parte applications. (See St. Paul Fire & Marine Insurance Company v. Superior Court (1984) 156 Cal.App.3d 82, 85; see also Sole Energy Company v. Hodges (2005) 128 Cal.App.4th 199, 207-208.)

5. Notice

The Court’s clerk shall provide notice.