Opinion
CV166061264S
10-04-2016
DelVecchio Reporting Services, LLC v. Clifford Edwards et al
UNPUBLISHED OPINION
MEMORANDUM OF DECISION MOTION TO SEAL (#117)
Robin L. Wilson, J.
The plaintiff, DelVecchio Reporting Services, filed a motion for a temporary injunction against the defendants, Clifford Edwards and San Edwards. The plaintiff's verified complaint is in three counts and alleges the following facts. The plaintiff is a Connecticut Limited Liability Company with a principal place of business in Madison, Connecticut. The plaintiff operates a court reporting agency in Madison that hires court reporters to provide services to its clients as independent contractors under written agreements that include, among other provisions, non-solicitation and confidentiality provisions.
The defendants are individuals who reside in Chester, Connecticut, and are court reporters licensed to do business in the state of Connecticut. On October 27, 2009, the defendant, Clifford Edwards executed the " Independent Court Reporter's Agreement" (agreement) and on November 3, 2009, the defendant, San Edwards also executed the agreement. Both agreements contain a non-solicitation provision that prohibit the defendants from performing reporting services for clients of the plaintiff and from soliciting clients of the plaintiff for five years after the termination of their employment with the plaintiff. Both agreements also contain a non-solicitation provision that prohibit the defendants from interfering and disrupting the relationship between the plaintiff and its clients and referral sources for five years after the termination of their employment with the plaintiff.
The defendants terminated their agreements with the plaintiff by a single resignation delivered to the plaintiff on February 5, 2016, sent by the defendant, San Edwards on behalf of herself and her spouse, the defendant, Clifford Edwards. On February 17, 2016, the plaintiff received a telephone call from one of its biggest clients that informed the plaintiff that it needed to drop its rates by 20% to keep its work because they have new reporters to cover the work. The plaintiff subsequently learned that the defendants were working for this client and were undercutting the plaintiff's rates. The plaintiff alleges that the defendants breached their agreements by performing services for clients of the plaintiff, by soliciting business from clients of the plaintiff and by disrupting and interfering with the relationship between the plaintiff and its clients and referral sources. Section 7 of the agreements provides that the plaintiff is entitled to immediate injunctive relief to stop violations of the non-solicitation agreements. The defendants continue to violate their agreements by performing court reporting services for clients of the plaintiff, by soliciting business from clients of the plaintiff and by disrupting and interfering with the relationship between the plaintiff and its clients. The plaintiff has suffered significant monetary losses as a result of the defendants' actions and is without an adequate remedy at law and will suffer irreparable harm if the requested injunctive relief is not granted. Count one of the complaint is for breach of contract; count two is for tortious interference with business relationships; and count three alleges a CUTPA violation.
The defendants have filed an answer and counterclaim. The defendants deny most of the allegations of the plaintiff's complaint and in their counterclaim allege the following facts. For more than ten years, both counterclaim plaintiffs have received assignments from the counterclaim defendant to provide court reporting services to attorneys throughout the state of Connecticut. Both counterclaim plaintiffs executed a document entitled " Independent Court Reporter's Agreement" when they started receiving assignments from the counterclaim defendant. The agreement specifically states that the counterclaim plaintiffs would be acting as independent contractors and not employees of the counterclaim defendant. The agreement does not define " Client" with specificity. The agreement describes the counterclaim defendant's clients to be the attorneys for whom the court reporting services are provided and also provides that the counterclaim plaintiffs are " not prohibited from working for other persons or entities, provided that performing such other activities does not interfere or conflict with the Reporter's obligations to the Company under the terms of this Agreement."
Esquire Deposition Solutions (Esquire) is a national court reporting service that uses local court reporters or court reporting agencies to provide reporters to law firms on some occasions. Esquire used the counterclaim defendant as an affiliate in Connecticut during the time the counterclaim plaintiffs provided services as independent contractors for the counterclaim defendant. During that same time period, Esquire used other court reporting agencies as Connecticut affiliates and also made assignments directly to individual court reporters not affiliated with a particular court reporting agency in Connecticut.
In or around the winter of 2015, Esquire contacted Clifford Edwards concerning the potential of he and San Edwards providing court reporting services for Esquire. The counterclaim plaintiffs made no attempt to disrupt the relationship between the counterclaim defendant and Esquire with respect to entering into a referral relationship. On February 2, 2016, Clifford Edwards individually executed a Service Partner Agreement with Esquire whereby he agreed as an independent contractor to accept court reporting assignments directly from Esquire. On February 3, 2016, San Edwards individually executed a Service Partner Agreement with Esquire whereby she agreed as an independent contractor to accept court reporting assignments directly from Esquire. The counterclaim plaintiffs formally terminated their relationship with the counterclaim defendant by letter dated February 5, 2016, and thereafter began receiving assignments from Esquire.
On March 14, 2016, the counterclaim plaintiffs received a letter from attorney Robert Lynch of Lynch, Traub, Keefe & Errante, P.C. as counsel for the counterclaim defendant advising the counterclaim plaintiffs of the terms of their agreement with the counterclaim defendant. At or about the same time that attorney Lynch's letter was received by the counterclaim plaintiffs, the counterclaim defendant individually and/or through counsel was in contact with Esquire concerning the counterclaim plaintiffs. The counterclaim defendant provided Esquire with a copy of the agreement between the counterclaim plaintiffs and counterclaim defendant and expressed concern that the counterclaim plaintiffs were violating the terms of that agreement. Esquire advised the counterclaim defendant that Esquire was not a client of the counterclaim defendant and that the agreement was not enforceable and did not restrict the counterclaim plaintiffs from receiving assignments from Esquire. Nonetheless, since attorney Lynch's letter was received, and Esquire was contacted by the counterclaim defendant, the counterclaim plaintiffs have not received any court reporting assignments.
Count one of the counterclaim alleges a breach of contract; count two alleges breach of duty of good faith and fair dealing; count three alleges tortious interference with a contract and count four alleges CUTPA. The counterclaim plaintiffs allege that as a result of the counterclaim defendant's actions they have suffered damages and losses.
On August 19, 2016, the plaintiff filed a motion to seal the names of its " clients" and referral sources (client list) on grounds that said client list constitutes a trade secret. The defendants have filed an objection to the motion on grounds that the client list the plaintiff seeks to seal consists of numerous law firms and national court reporting agencies that the plaintiff deems to be its clients. The defendants argue that the identity of the law firms and agencies on the list is not confidential and the plaintiff contracts with numerous independent court reporters each of whom is aware of the identity of the plaintiff's purported clients. The defendants further argue that all attorneys involved in depositions arranged through the plaintiff, whether the contracting firm or one attending and receiving a transcript, are aware of the identity of the clients. Moreover, the list of law firms and agencies is a comprehensive list of litigation firms in the state of Connecticut. Consequently the identity of those firms is no secret to any practicing attorney or court reporter in the state of Connecticut. The defendants further argue that the lists are not sealable because the plaintiff does not have a protectable interest in the identity of its purported clients because the law firms the plaintiff lists also use other court reporting agencies in the state on a regular basis and the national agencies contract with other court reporting agencies in the state and with individual court reporters. As such, the defendants argue, there is no exclusive relationship between the plaintiff and any of the " clients" listed by the plaintiff. The defendant further argues that the plaintiff does not have any written contracts with the law firms and agencies that either provide for an exclusive arrangement or that indicate that their relationship is confidential.
Oral argument was heard on the motion at short calendar on September 19, 2016.
DISCUSSION
Practice Book § 11-20A governs the sealing or limiting of disclosure of documents in civil cases. " Except as otherwise provided by law, there shall be a presumption that documents filed with the court shall be available to the public." Practice Book § 11-20A(a). Thus, as a general rule, " the judicial authority shall not order that any . . . documents . . . on file with the court or filed in connection with a court proceeding be sealed or their disclosure limited." Practice Book § 11-20A(b). Nevertheless, " the judicial authority may order that [such documents] be sealed or their disclosure limited . . . if the judicial authority concludes that such order is necessary to preserve an interest which is determined to override the public's interest in viewing such materials." Practice Book § 11-20A(c). Prior to issuing an order sealing or limiting the disclosure of documents, " [t]he judicial authority shall first consider reasonable alternatives to any such order and any such order shall be no broader than necessary to protect such overriding interest." Id. Finally, " [i]n connection with any order issued pursuant to subsection (c) . . . the judicial authority shall articulate the overriding interest being protected and shall specify its findings underlying such order and the duration of such order." Practice Book § 11-20A(d).
" [Section] 11-20A codifies the common-law presumption of public access to judicial documents, meaning any document filed with the court that the court reasonably could rely on in support of its adjudicatory function." Rosado v. Bridgeport Roman Catholic Diocesan Corp., 292 Conn. 1, 30, 970 A.2d 656, cert. denied sub nom. Bridgeport Roman Catholic Diocesan Corp. v. New York Times Co., 558 U.S. 991, 130 S.Ct. 500, 175 L.Ed.2d 348 (2009). " The presumption of openness of court proceedings . . . is a fundamental principle of our judicial system . . . This policy of openness is not to be abridged lightly. In fact, the legislature has provided for very few instances in which it has determined that, as a matter of course, certain privacy concerns outweigh the public's interest in open judicial proceedings . . . The right to have documents sealed is not a right the parties have as against each other; the court must determine the question as against the demands of the public interest." (Citation omitted; internal quotation marks omitted.) Bank of New York v. Bell, 120 Conn.App. 837, 846, 993 A.2d 1022, cert. denied, 298 Conn. 917, 4 A.3d 1225 (2010).
" It is difficult to distill from the relatively few judicial decisions a comprehensive definition of what is referred to as the common-law right of access or to identify all the factors to be weighed in determining whether access is appropriate. The few cases that have recognized such a right do agree that the decision as to access is one best left to the sound discretion of the trial court, a discretion to be exercised in light of the relevant facts and circumstances of the particular case." Nixon v. Warner Communications, Inc., 435 U.S. 589, 598-99, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1972). In exercising its discretion, this court fully acknowledges that " however painful or embarrassing the disclosure of information may be, such disclosure must be carefully balanced against the public's right to know . . . or at least to be able to know, if it so chooses . . . what is happening in our courthouses." Soroka v. Household Automotive Finance Corp., Superior Court, Judicial District of New Haven, Docket No. CV 04 4000300 (Apr. 30, 2007, Silbert, J.) [43 Conn.L.Rptr. 481, ].
" [T]he Superior Court has opined that, in order to overcome the [Practice Book] § 11-20A presumption in favor of public access to judicial documents, a specific injury which would unfairly harm the parties must be shown and the sealing must be narrowly tailored to it." (Internal quotation marks omitted.) Redmond v. Promotico, Superior Court, judicial district of New Haven, Docket No. CV-12-6029399-S (October 16, 2012, Wilson, J.) (54 Conn.L.Rptr. 828, 829, ).
General Statutes § 35-55 provides in relevant part that " a court shall preserve the secrecy of an alleged trade secret by reasonable means which may include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records of the action and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval." Under General Statutes § 35-51(d), the Uniform Trade Secrets Act, " trade secret is defined as information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list that: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, 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." General Statutes § 35-51(d); Lydall, Inc. v. Ruschmeyer, 282 Conn. 209, 221, 919 A.2d 421 (2007).
" '[T]he party claiming trade secret protection must prove that the information: (1) is of independent economic value; and (2) was the subject of reasonable efforts to maintain its secrecy.' Elm City Cheese Co. v. Federico, 251 Conn. 59, 78, 752 A.2d 1037 (1999). 'The question of whether information sought to be protected by the trade secrets act rises to the level of a trade secret is one of fact for the trial court . . .' Where the primary issue to be determined is 'whether there is a trade secret existing which is to be protected'; (internal quotation marks omitted) id., at 70, 752 A.2d 1037; the court must engage in a three-step process: (1) identify the information that allegedly constitutes a trade secret; (2) determine whether the information is of the kind 'included in the nonexhaustive list contained in the statute'; id.; and (3) decide whether the 'information sought to be protected [is] the subject of efforts that are reasonable under the circumstances to maintain its secrecy.' (Internal quotation marks omitted.) Id., at 78, 752 A.2d 1037." Bank of New York v. Bell, 120 Conn.App. 837, 857-58, 993 A.2d 1022 (2010).
" Whether information merits protection in a particular case depends upon: 1) the extent to which the information is known outside the business; 2) the extent to which information is known to those inside the business; 3) the measures taken to guard the secrecy of the information; and 4) the value of the information to the business and its competitors." Firmode v. Int'l Watch Group, Inc. et al., 2009 WL 3698137 (E.D.N.Y. November 2, 2009), citing ABC Rug & Carpet Cleaning Serv., Inc. v. ABC Rug Cleaners, Inc., No. 08 Civ. 5737, 2009 WL 105503, at *3 (S.D.N.Y. Jan. 14, 2009).
" There is no trade secret however, if the customers' names can readily be ascertained through ordinary business channels or reference resources." Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. at 525, 538, 546 A.2d 216 (1988). " [W]here the identity of the customers is readily ascertainable through ordinary business channels or through classified business or trade directories, the courts refuse to accord to the list the protection of a trade secret." Elm City Cheese Co. v. Federico, supra, 251 Conn. at 103. " Some factors to be considered in determining whether given information is one's trade secret are (1) the extent to which the information is known outside of his business; (2) the extent to which it is known by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended by him in developing the information; [and] (6) the ease or difficulty with which the information could be properly acquired or duplicated by others." Department of Public Utility v. Freedom of Information Commission, 55 Conn.App. at 527, 530, 739 A.2d 328 (1999).
In the present case, the plaintiff claims that the names of its clients and referral sources, who consists of law firms and national court reporting agencies (" client list") constitute a trade secret in which the plaintiff has a substantial privacy interest and thus should be sealed. The plaintiff here has failed to meet its burden of proof that the purported client list is a trade secret. The rules enunciated in the previously cited cases require this court to make a factual determination as to whether the plaintiff's purported client list is a trade secret. The plaintiff has not submitted any evidence, through affidavits and/or other competent evidence to demonstrate the extent to which the information is known outside the business; the extent to which information is known to those inside the business; the measures taken to guard the secrecy of the information; and the value of the information to the business and its competitors. Indeed, the defendants make a persuasive argument and the plaintiff conceded at oral argument, that at least with respect to the identity of the list of law firms, the plaintiff contracts with numerous court reporters and each of the reporters is aware of the identity of the law firms who are clients of the plaintiff. In addition, all of the attorneys involved in depositions arranged through the plaintiff are aware of the plaintiff's clients. The list of law firms is a comprehensive list of litigation firms in the state of Connecticut and the identity of those firms is no secret to any practicing attorney or court reporter in the state of Connecticut.
Likewise, with respect to the list of national court reporting agencies and referral sources, which the plaintiff claims are trade secrets, again, the plaintiff has failed to submit any evidence to demonstrate the extent to which the referral sources are known outside the business; the extent to which they are known to those inside the business; the measures taken by the plaintiff to guard the secrecy of the information; and the value of the information to the business and its competitors. According to the defendant the identity of the national court reporting agencies and/or referral sources, like the law firms is no secret to any practicing attorney or court reporter in the state of Connecticut. The fact that the agencies are national agencies is indicative of its identity being readily ascertainable through ordinary business channels. Without evidence from the plaintiff demonstrating that there was a confidential relationship between it and the law firms and referral sources, and any measures it may have taken to guard the secrecy of the identity of these law firms and referral sources, the court cannot conclude that this " client list" is a protected trade secret. Accordingly, since the plaintiff has failed to meet its burden of proving trade secret protection, the motion to seal is DENIED.