Judge: Yolanda Orozco, Case: 19STCV32242, Date: 2022-09-20 Tentative Ruling
Case Number: 19STCV32242 Hearing Date: September 20, 2022 Dept: 31
MOTION FOR A PROTECTIVE ORDER IS GRANTED
Background
On September 11, 2019, Plaintiff Lydia Lim filed a Complaint against ADP Total Source Inc.; Pro-Com Products, Inc.; and Does 1 to 250. On January 15, 2020, Plaintiff filed the First Amended Complaint (“FAC”). The FAC asserts causes of action for:
1) Violation of California Family Rights Act;
2) Discrimination (Associational) in Violation of FEHA;
3) Gender Discrimination;
4) Failure to Prevent/Remedy Discrimination;
5) Wrongful Termination in Violation of Public Policy; 6.
6) Breach of Written Contract;
7) Breach of Implied-in-Fact Contract; and
8) Breach of the Covenant of Good Faith and Fair Dealing.
On May 24, 2024, Defendant/Cross-Complainant Prom-Com Products Inc. filed an Amended Cross-Complaint against Plaintiff/Cross-Defendant and Roes 1 to 10 for:
1) Breach of Fiduciary Duty;
2) Professional Negligence;
3) Breach of Contract; and
4) Violation of Penal Code Section 502.
On February 01, 2022, Pro-Com moved to disqualify Plaintiff’s counsel and for a protective order to prevent Plaintiff from using documents that were allegedly wrongfully obtained and retained by her during her work as in-house counsel for Pro-Com. The Court denied both motions. (Min. Ord. 02/28/22.) The Court also denied Pro-Com’s request to file documents under seal. (Id.)
On August 25, 2022, Pro-Com filed an Ex Parte Application for an Order to Seal Attorney-Client Communications. The Application was denied because there was no evidence of irreparable harm, immediate danger, or other statutory bases for granting relief under CRC 3.1202(c). (Min. 08/26/22.)
On August 08, 2022, Pro-Com filed a noticed Motion for a Protective Order. Plaintiff filed Opposition papers on August 23, 2022.
On September 13, 2022, Pro-Com filed a Reply.
LEGAL STANDARD
Code of Civil Procedure § 2025.420(a) provides before, during or after a deposition an affected party may move for a protective order. “The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Code Civ. Proc., § 2025.420(b).) Courts have considerable discretion in granting and crafting protective orders. (Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.)
MEET AND CONFER
The motion for a protective order must be accompanied by a meet and confer declaration. (CCP § 2030.090(a).) The parties’ meet and confer efforts must be a significant attempt at informal resolution of the dispute. (Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006, 1016 (internal quotations and citations omitted); CCP § 2016.040)
Defense counsel asserts he has met extensively with Plaintiff’s counsel regarding the issues raised in the protective order, but no resolution was reached. (Samee Decl. Ex. C.)
DISCUSSION
Pro-Com seeks a protective order precluding Plaintiff Lim from using Pro-Com documents which she admits taking from the company without authorization and outside ordinary discovery channels during future depositions.
Plaintiff Lydia Lim is a former in-house attorney for Pro-Com. During her employment, she had access to many confidential documents and appears to have retained copies of those documents. Plaintiff was required to return the documents to Pro-Com, both under her employment contract and as a part of her professional responsibility as Pro-Com’s counsel, at the conclusion of her employment. Plaintiff does not dispute the fact she took and continues to retain the documents. Moreover, Pro-Com asserts that documents in question contain confidential and proprietary information, and some are subject to attorney-client privilege. (Smee Decl. ¶ 9.)
Plaintiff does not deny that she attempted to use the confidential documents in her FEHA case against Pro-Com, during the deposition of Pro-Com employee, Johnny Zhu. Zhu learned that his wife had gained access to the confidential material via a link posted on the Court’s website posted by Lim. Zhu’s wife’s attorney then used the material in unrelated pending dissolution proceedings against Zhu. (Zhu Decl. ¶ 4.)
Despite Pro-Com’s repeated requests that the documents be returned and after serving discovery demands for the documents, Lim has remained steadfast in her refusal to comply. Lim only produced the documents in the middle of Zhu’s deposition. (Smee Decl. ¶ 4.)
Contents of the Documents
Pro-Com asserts that one of the documents describes the ownership structure of Pro-Com in comparison to various affiliates, subsidiaries and shareholders. There is also one document bearing on outstanding accounts receivable to Pro-Com. There is also an email authored by Lim, dated May 21, 2018, outlining problems that Lim’s replacement needs to address, including problems with piercing the corporate veil, commingling of assets, etc., and a history of “misrepresentations” made by the company. Pro-Com asserts that it does not know what additional material Lim “absconded with,” hence the need for a protective order limiting inquiry only to documents obtained through formal discovery.
For this reason, Pro-Com asks that all the documents be ordered returned and that Lim’s counsel be precluded from referring to any documents obtained from any source independent of formal discovery channels. This Court has already found that Plaintiff had and has no right to retain Pro-Com documents after her termination and may be in violation of the California Rule of Professional Conduct 3-700(D)(1) (Min. Or. 02/28/22.)
Plaintiff asserts that some of the documents are needed to defend herself in the malpractice action. Pro-Com’s request for a protective order in no way precludes Plaintiff from accessing these documents via formal discovery, if these documents are otherwise relevant and discoverable.
Although Plaintiff cites Evidence Code section 958, allowing for the disclosure of privileged information in a malpractice suit, that section along with other cited authorities do not support the proposition that Lim can retain Pro-Com’s documents after her termination or that she can refuse to return them to the client due to a pending a malpractice suit.
In California, the client papers and property belong to the client, not the attorney. (See Rose v. State Bar (1989) 49 Cal.3d 646, 655. The client's ownership is not altered by the circumstances or the timing of the termination of the attorney-client relationship, or by whether the attorney has been paid for his or her services. (See Academy of California Optometrists, Inc. v. Superior Court (1975) 51 Cal.App.3d 999, 1005-06; see also Cal. State Bar Formal Opn. No. 1994-134; No. 2001-158.)
The Court has broad discretion to make any order that justice requires to protect a party under Code of Civil Procedure Section 2025.420. The Court at this time makes the following Orders:
First, Plaintiff is ordered to provide to Pro-Com a complete list of all the documents she took and retained from Pro-Com with enough description to generally identify the documents.
Second, Plaintiff is ordered to return any and all documents she took and retained from Pro-Com in their original form and is also ordered to destroy any and all copies she has made. Even if the documents are not privileged, or confidential, the documents are the sole property of Pro-Com and must be returned. (See Coalition Against Police Abuse v. Superior Court (1985) 170 Cal.App.3d 888, 904 [trial court’s order to return document subject to a protective order upon settlement of litigation did not offend the First Amendment and the order was not abuse of discretion].
Third, Plaintiff is ordered to go through formal discovery statutes to obtain any discovery to which Plaintiff believes she is entitled.
Fourth, Plaintiff is ordered to refrain from using any of the documents she took and retained from Pro-Com in any deposition or other proceeding.
“The state has two substantial interests in regulating pretrial discovery. The first is to facilitate the search for truth and promote justice. The second is to protect the legitimate privacy interests of the litigants and third parties. [Citation] The interest in truth and justice is promoted by allowing liberal discovery of information in the possession of the opposing party. [Citation.] The interest in privacy is promoted by restricting the procurement or dissemination of information from the opposing party upon a showing of ‘good cause.’ [Citations.] The trial court is in the best position to weigh fairly the competing needs and interests of parties affected by discovery. [Citation].”
(Stadish, supra, 71 Cal.App.4th at 1145.)
CONCLUSION
Defendant’s Motion for Protective Order is GRANTED as outlined above.
Defendant to give notice.
The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All social distancing protocols will be observed at the Courthouse and in the courtrooms.