Judge: Stephen P. Pfahler, Case: 23CHCV00946, Date: 2023-08-14 Tentative Ruling

Case Number: 23CHCV00946    Hearing Date: November 30, 2023    Dept: F49

Dept. F-49

Date: 11-30-23

Case #23CHCV00946

Trial Date: Not Set

INJUNCTION

MOVING PARTY: Defendants, Bradley Spencer, et al.

RESPONDING PARTY: Plaintiffs, Jay Cook-Wong, et al.

RELIEF REQUESTED

Motion for Preliminary Injunction

SUMMARY OF ACTION

Plaintiffs Jay and Danny Cook-Wong co-founded defendant Same Love Surrogacy, LLC and currently own a 49% interest in the business entity. Defendant Bradley Spencer also co-founded Same Love Surrogacy and owns a 51% interest. Plaintiff Chien Fang Wang provides unspecified employment services “primarily” from the Peoples Republic of China. Plaintiffs allege Spencer manages business operations, including “supervisor” of all individual plaintiffs.

All parties work remotely or not in any indicated central space. Plaintiffs allege Spencer in the position as majority shareholder and company director both improperly manages human resources issues, and engaged in a pattern and practice of “sexual assault and sexual harassment” against both the Cook-Wang plaintiffs in their individual residences and/or shared hotel rooms during business travels. Plaintiffs additionally allege Spencer withheld shareholder distributions in retaliation and through control of the company.

On April 3, 2023, Plaintiffs filed their complaint for Sexual Battery, Assault, Sexual Harassment, Workplace Harassment, Intentional Infliction of Emotional Distress, Retaliation, Conversion, Trespass, and Invasion of Privacy. On April 10, 2023, Plaintiffs filed their first amended complaint for Sexual Battery, Assault, Work Place Harassment, Intentional Infliction of Emotional Distress, Retaliation, Conversion, Trespass, Invasion of Privacy, and Non-Payment of Wages. Same Love Surrogacy, LLC is the only named defendant in the Retaliation cause of action. Spencer is the only named defendant in the Sexual Battery, Assault, Sexual Harassment, Workplace Harassment, Intentional Infliction of Emotional Distress, and Trespass causes of action.

On August 14, 2023, the court denied the motion to compel arbitration filed by defendants Same Love Surrogacy, LLC and Bradley Spencer. On August 29, 2023, defendants answered. Defendant Same Love Surrogacy, LLC also filed cross-complaint against Jay and Danny Cook-Wong, and new party All Love Surrogacy, LLC for Violation of California Comprehensive Computer Data Access and Fraud Act (Penal Code section 502), Violation of Penal Code section 496, Misappropriation of Trade Secrets, Breach of Duty of Loyalty, Violation of Business and Professions Code section 17200, Conversion, Intentional Interference with Prospective Business Advantage, Intentional Interference with Contractual Relations, and Breach of Contract.

RULING: Continued.

Defendant/Cross-Complainant Same Love Surrogacy, LLC (SLS) moves for a preliminary injunction against plaintiffs/cross-defendants Jay Cook Wong, Danny Cook-Wong, and All My Love Surrogacy, LLC (ALMS) from soliciting, employing, retaining or otherwise doing business with any current or former Same Love Surrogacy Employee; utilizing any data, documents, or information, including trade secrets by any person from SLS; compelling cross-defendants to contact each and every surrogate affiliated with SLS in order to terminate relationships with ALMS; and, return and/or destroy all confidential information in responding parties possession.

Plaintiffs/Cross-Defendants in opposition present seven individual points: 1) the subject matter of the instant motion belongs in arbitration; 2) the motion lacks a sufficient showing of urgency/inadequate remedy at law; 3) lack of a legal basis for the injunction in that the motion fails to establish the existence of a trade secret; 4) further lack of basis for injunctive relief due to insufficient showing of damages as a result of any alleged misappropriation of trade secrets; 5) lack of probability of success due to preemption of the California Trade Secrets Act; 6) improper prohibitory relief sought; and, 7) a prohibition from bringing the injunction against the Cook-Wong parties due to the allowable competition clause in the operation agreement.

SLS in reply maintains proper jurisdiction for the motion, a probability of success on the merits due to the existence of trade secrets and lack of preemption, characterization of the conduct of responding parties as unjustified “theft,” and irreparable harm if injunctive relief is not granted.

On a threshold note, the court acknowledges the concurrent motion to seal records. The Declaration of Michael Snaric and a significant portion of exhibits in the declaration of Bradley Spencer relies on the documents addressed in the motion to seal records, which the court cannot consider unless and until moving parties elect to submit the documents should the court grant the motion to seal; withdraw the documents and proceed without the referenced exhibits should the court deny the motion; or, elect to submit the documents, including the possibility of some form of redacted documents, upon a denied motion. This court adheres to a policy of conducting its law and motion with the parties presenting all intended argument at the time of the hearing, in order to avoid potential advisory hearings Supplemental briefing remains a possibility, but the court still prefers consideration of all evidence in order to refine supplemental briefing guidelines, rather than address fundamental support of a motion.

Because the motion was filed several months after the initiation of the action and cross-complaint, the court finds no exigency in considering the motion. The court therefore continues the hearing to January 23, 2024, pending the hearing on the motion to seal documents. Following the order on the motion to seal, moving party may elect how to proceed, including a request for a further continuance of the hearing. The court will hear the preliminary injunction prior to the motion to compel arbitration even upon a second continuance of the motion caused by court congestion and/or other delays between the parties, if applicable.

Case Management Conference and (second) Motion to Compel Arbitration filed by Jay Cook-Wong, Danny Cook-Wong, and All Love Surrogacy as to the cross-complaint set for March 13, 2024.

Moving parties to give notice.

Dept.
F-49

Date:
11-30-23

Case
#23CHCV00946

Trial
Date: Not Set

MOTION TO SEAL DOCUMENTS

MOVING
PARTY: Defendants, Bradley Spencer, et al.

RESPONDING
PARTY: Plaintiffs, Jay Cook-Wong, et al.

RELIEF
REQUESTED

Motion
to Seal Documents

SUMMARY
OF ACTION

Plaintiffs
Jay and Danny Cook-Wong co-founded defendant Same Love Surrogacy, LLC and
currently own a 49% interest in the business entity. Defendant Bradley Spencer
also co-founded Same Love Surrogacy and owns a 51% interest. Plaintiff Chien
Fang Wang provides unspecified employment services “primarily” from the Peoples
Republic of China. Plaintiffs allege Spencer manages business operations,
including “supervisor” of all individual plaintiffs.

All
parties work remotely or not in any indicated central space. Plaintiffs allege
Spencer in the position as majority shareholder and company director both
improperly manages human resources issues, and engaged in a pattern and
practice of “sexual assault and sexual harassment” against both the Cook-Wang
plaintiffs in their individual residences and/or shared hotel rooms during
business travels. Plaintiffs additionally allege Spencer withheld shareholder
distributions in retaliation and through control of the company.

On
April 3, 2023, Plaintiffs filed their complaint for Sexual Battery, Assault,
Sexual Harassment, Workplace Harassment, Intentional Infliction of Emotional
Distress, Retaliation, Conversion, Trespass, and Invasion of Privacy. On April
10, 2023, Plaintiffs filed their first amended complaint for Sexual Battery,
Assault, Work Place Harassment, Intentional Infliction of Emotional Distress, Retaliation,
Conversion, Trespass, Invasion of Privacy, and Non-Payment of Wages. Same Love
Surrogacy, LLC is the only named defendant in the Retaliation cause of action.
Spencer is the only named defendant in the Sexual Battery, Assault, Sexual
Harassment, Workplace Harassment, Intentional Infliction of Emotional Distress,
and Trespass causes of action.

On
August 14, 2023, the court denied the motion to compel arbitration filed by
defendants Same Love Surrogacy, LLC and Bradley
Spencer. On August 29, 2023, defendants answered. Defendant Same Love
Surrogacy, LLC also filed cross-complaint against Jay and Danny Cook-Wong, and
new party All Love Surrogacy, LLC for Violation of California Comprehensive
Computer Data Access and Fraud Act (Penal Code section 502), Violation of Penal
Code section 496, Misappropriation of Trade Secrets, Breach of Duty of Loyalty,
Violation of Business and Professions Code section 17200, Conversion,
Intentional Interference with Prospective Business Advantage, Intentional
Interference with Contractual Relations, and Breach of Contract.

RULING:  Denied, without prejudice.

Defendant/Cross-Complainant Same
Love Surrogacy, LLC (SLS) moves to seal documents presented in support of the
motion for preliminary injunction in the form of certain e-mails.

Plaintiffs/Cross-Defendants in
opposition present seven individual points: 1) the subject matter of the instant
motion belongs in arbitration; 2) the motion lacks a sufficient showing of
urgency/inadequate remedy at law; 3) lack of a legal basis for the injunction
in that the motion fails to establish the existence of a trade secret; 4)
further lack of basis for injunctive relief due to insufficient showing of
damages as a result of any alleged misappropriation of trade secrets; 5) lack
of probability of success due to preemption of the California Trade Secrets
Act; 6) improper prohibitory relief sought; and, 7) a prohibition from bringing
the injunction against the Cook-Wong parties due to the allowable competition
clause in the operation agreement.

The court electronic filing system
shows no opposition or reply on file at the time of the tentative ruling
publication cutoff. Because the motion was set as an ex parte hearing, the
court reserves the right to take the matter under submission pending potential submission
of a written opposition and oral argument.

A party requesting that a record be filed under seal must
file a motion or an application for an order sealing the record. The motion or
application must be accompanied by a memorandum and a declaration containing
facts sufficient to justify the sealing. (Cal. Rules of Court, Rule
2.551(b)(1).)

Unless confidentiality is required by law, court records are
presumed to be open. (Id. at
2.550(c).) To grant an order sealing records, the court must expressly find
that Defendant has presented facts that establish:

(1) There exists an overriding interest that overcomes the
right of public access to the record;

(2) The overriding interest supports sealing the record;

(3) A substantial probability exists that the overriding
interest will be prejudiced if the record is not sealed;

(4) The proposed sealing is narrowly tailored; and

(5) No less restrictive means exist to achieve the
overriding interest.

Id. at 2.550(d). 

To establish that an overriding interest is sufficient,
plaintiff must clearly identify the interest and demonstrate “a substantial
probability that it will be prejudiced absent sealing or closure.”  (Universal
City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4^th
1273, 1283.)

Moving parties describe the series of e-mails as
“confidential information” under an apparent claim of third party personal
information, as well trade secret/proprietary information, though not
specifically stated as such in the instant motion. (McGuan v. Endovascular
Technologies, Inc. (2010) 182 Cal.App.4th 974, 988.)

While medical information remains indisputably privacy
protected from public disclosure, the court finds the motion lacks specific
support for a nexus between said medical private information and the existence
of a trade secret. The motion lacks actual address of the proprietary
information/trade secret standard, and the court declines to make the argument
for moving party.

Even assuming the identified participants and their
potential medical information can constitute a trade secret however, the court
cannot determine from the motion why and how the entire sets of e-mails remain
confidential. In other words, to the extent the personal information
constitutes the trade secret, the court accepts the existence of potential
third party identifying information as both protected and valuable for purposes
of the subject motion. The court remains unable to determine the necessity of sealing
all said records, rather than just allowing the redaction of the personal
identifying and potential medical information, thereby otherwise allowing the
presentation of the remaining information.

The court therefore denies the motion to seal the records.
Given the e-mails were presumably between the parties, and responding parties
may be entitled to certain records as shareholders of the corporate entity as
well, the court invites the parties to consider potential entitlement to the
records. The parties may consider a protective order regarding disclosure
limitations, such as an agreement regarding the identity of any and all
individuals constituting a part of the challenged proprietary list. The protective
order can include terms such as redacted e-mails as part of the consideration
for motion for preliminary injunction.

Given the concurrently continued hearing on the motion for
preliminary injunction to January 23, 2024, any documents, including
potentially redacted documents, shall be filed with the court in conjunction
with the motion for preliminary injunction no later than 16 court days before
the new hearing date—January 8, 2024. If the parties require more time, the
court can continue the preliminary injunction. The motion for preliminary
injunction will be heard before the motion to compel arbitration, even if the court
moves both hearings, so there is no incentive to delay any potential agreement
for the collateral benefit of delaying the hearings.

Case Management Conference and (second) Motion to Compel
Arbitration filed by Jay Cook-Wong, Danny Cook-Wong, and All Love Surrogacy as
to the cross-complaint set for March 13, 2024.

Moving parties to give notice.