Opinion
2:20-cv-00791-MCE-AC
07-01-2022
VIBRANTCARE REHABILITATION, INC, Plaintiff, v. KIRAN DEOL, and John and Jane Does 1 through 10, Defendant.
ORDER
ALLISON CLAIRE UNITED STATES MAGISTRATE JUDGE
This matter is before the court on defendant's motion to compel discovery. ECF No. 46. The matter was taken under submission on the papers. ECF No. 47. The parties submitted the required joint statement. ECF No. 48. Based on a review of all papers filed, the court DENIES defendant's motion.
I. Relevant Background
Plaintiff VibrantCare is one of the largest providers of outpatient physical and occupational therapy services in the Western United States. ECF No. 23 at 2. Plaintiff hired defendant Kiran Deol in March of 2018 as a corporate recruiter. Id. In that role, Deol was responsible for finding, soliciting, and hiring qualified therapists for VibrantCare's operations. Doel later promoted to Director of Recruiting, where she was responsible for the oversight of recruiting operations in multiple states. Id. According to VibrantCare's operative Amended Complaint, Doel had access to VibrantCare's confidential information and trade secrets regarding its vendor and referral network, patient scheduling system, business strategies, costs and payment structure, margins, and other highly sensitive information, which she used to attract candidates. Id.
On January 19, 2020, Doel gave notice of her resignation effective January 31, 2020. Id. VibrantCare alleges that it later discovered that by the time she resigned, Deol had been offered and accepted the position of Director of Talent Acquisition for Golden Bear Physical Therapy and Sports Injury Center, Inc. (“Golden Bear”), a direct competitor of VibrantCare's in Northern California. Id. Plaintiff alleges that Doel misappropriated a significant amount of VibrantCare's confidential, proprietary, and trade secret information before her resignation; specifically, Deol allegedly emailed VibrantCare's highly sensitive information and confidential patient information to her personal e-mail account in the days before her final workday with VibrantCare. Id. at 3.
Plaintiff alleges defendant violated the VibrantCare Employee Agreement she had signed, and brings a breach of contract claim. ECF No. 23. Plaintiff also brings claims for unfair competition, breach of fiduciary duty, violation of the Defend Trade Secrets Act, and violation of the California Uniform Trade Secrets Act. Id. at 9-13. The parties have been engaging in discovery. On May 17, 2021, the District Judge assigned to this case clarified that discovery closes 365 days from defendant Doel's answer (ECF No. 25); discovery therefore closes on April 11, 2023. See ECF No. 39.
II. Motion
Defendant filed the pending motion to compel on May 19, 2022. ECF No. 46. The parties filed the required joint statement on June 1, 2022. ECF No. 48.
III. Analysis
A. Legal Standard on Motion to Compel
The scope of discovery under Federal Rule of Civil Procedure 26(b)(1) is broad. Discovery may be obtained as to “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Id. The court, however, may limit discovery if it is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;” or if the party who seeks discovery “has had ample opportunity to obtain the information by discovery;” or if “the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed.R.Civ.P. 26(b)(2)(C). The purpose of discovery is to “make a trial less a game of blind man's bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent,” United States v. Procter & Gamble Co., 356 U.S. 677, 682 (1958) (citation omitted), and “to narrow and clarify the basic issues between the parties.” Hickman v. Taylor, 329 U.S. 495, 501 (1947).
Under Federal Rule of Civil Procedure 37(a)(3)(B), a motion to compel may be made if “a party fails to answer an interrogatory submitted under Rule 33; or a party fails to produce documents or fails to respond that inspection will be permitted ... as requested under Rule 34.” The party seeking to compel discovery has the burden of showing that the discovery sought is relevant or that its denial will cause substantial prejudice. Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). The opposing party is “required to carry a heavy burden of showing why discovery was denied.” Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975).
B. Interrogatory No. 5; Document Request Nos. 16-171
The parties dispute the adequacy of responses to the following interrogatories and requests for production regarding VibrantCare's general protection of trade secrets: Interrogatory No. 5:
Identify all of Plaintiff's current or former officers, executives, or employees having recruiting duties who are not or were not, during their employment with VibrantCare, bound by any restrictive covenant agreement at any time from January 1, 2010 to the present.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad in substance
and in time, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited from disclosing under California law. VibrantCare is not seeking to enforce any restrictive covenant against Defendant in this matter other than the confidentiality provision in her agreement with VibrantCare. Subject to and without waiving the foregoing objections, VibrantCare states that its current or former employees who were involved in recruiting were subject to confidentiality and non-disclosure restrictions similar or identical to those executed by Defendant.
The parties dispute several different discovery requests, which they jointly briefed by grouping related interrogatories and requests for production together by topic. ECF No. 48. Each group is addressed in the order that the parties addressed it in their joint statement. Id.
Request No. 16:
All agreements containing restrictive covenants of any kind signed by employees or former employees of VibrantCare from January 2018 to the present.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence, calling for private records of unrelated third parties, and calling for information protected from disclosure by California state law. This lawsuit only concerns VibrantCare's enforcement of a confidentiality provision against Defendant. Any dispute that VibrantCare may have had with any other employee is not relevant to any claim or defense in this matter.
Request No. 17:
Any and all communications between or among any officers, directors, representatives, or employees of Plaintiff relating to any restrictive covenant with any employee, including without limitation any VibrantCare Employee Agreement signed by any VibrantCare employee within the last two years, related to the possible breach or enforcement of any such covenant or agreement by or against an such employee or former employee, including against Defendant. To the extent that you allege any communications are privileged, please include a privilege log identifying any responsive communications over which you assert a privilege.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence, calling for private records of unrelated third parties, and calling for information protected from disclosure by California state law. This lawsuit only concerns VibrantCare's enforcement of a confidentiality provision against Defendant. Any dispute that VibrantCare may have had with any other employee is not relevant to any claim or defense in this matter.ECF No. 48 at 6-7.
Defendant argues that the discovery questions above “go directly to the heart of VibrantCare's efforts to protect its alleged trade secrets” and are therefore relevant. ECF No. 24 at 7. Specifically, Doel argues that if VibrantCare does not consistently make and enforce restrictive covenants with its officers, executives, and employees, it can be argued that VibrantCare does not take reasonable efforts to protect its trade secrets. Id. VibrantCare states that it will “produce information and documents showing it took reasonable measures to protect from disclosure the information that VibrantCare contends Doel misappropriated from VibrantCare.” Id. at 8. However, VibrantCare contends Doel's discovery requests are overbroad and irrelevant, and that they imply “VibrantCare must prove it took measures to protect all of its trade secrets in order to have any information that qualifies as a trade secret.” Id. at 9. VibrantCare reasserts that it “has already agreed to provide all relevant information pertaining to the confidential and trade secret information that is actually at issue in this case.” Id.
The court agrees with VibrantCare that the above discovery questions are overbroad and seek, at least in part, irrelevant information. In general, “parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense....Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b)(1). “Relevance for purposes of discovery is defined very broadly.” Garneau v. City of Seattle, 147 F.3d 802, 812 (9th Cir. 1998). Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action. Fed.R.Evid. 401. Relevancy to the subject matter of the litigation “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). Relevance, however, does not establish discoverability; in 2015, a proportionality requirement was added to Rule 26. Under the amended Rule 26, relevance alone will not justify discovery; discovery must also be proportional to the needs of the case. “If the requirement for proportionality in discovery means anything, however, it must mean that burdensome, tangential discovery should not be permitted based on the mere possibility that something may turn up to support what is otherwise only speculation.” McCall v. State Farm Mut. Auto. Ins. Co., No. 2:16-cv-01058-JAD-GWF, 2017 WL 3174914, at *9 (D. Nev. July 26, 2017).
The parties agree that Doel's discovery requests are relevant insofar as they pertain to defendant herself, the particular trade secret information at issue in this case, and the agreement defendant signed. ECF No. 48 at 9. For example, in response to Deol's Request No. 35, VibrantCare agreed to produce responsive, non-privileged documents pertaining to all “internal notes, memos, and written and/or email communications, relating to non-privileged communications between or among any officers, directors, representatives, or employees of Plaintiff at any time since January 2018 to the present regarding Defendant, Golden Bear, or any of the allegations or claims contained in the Complaint, or the underlying factual bases for such claims.” ECF No. 48 at 9-10.
As to Interrogatory No. 5, VibrantCare raised objections but ultimately adequately responded to the question by stating that “its current or former employees who were involved in recruiting were subject to confidentiality and non-disclosure restrictions similar or identical to those executed by Defendant.” As to the requests for production, seeking “[a]ll agreements containing restrictive covenants of any kind” and “all communications between or among any officers, directors, representatives, or employees” related to any restrictive covenant are clearly disproportionate to the issues present in this case. Doel's reliance on Sprint Commc'ns Co. L.P. v. Charter Commc'ns, Inc., No. 20-CV-2161-JWB-TJJ, 2020 WL 7770931, at *6 (D. Kan. Dec. 30, 2020) is not persuasive. In the relied-on portion of that case, an RFP sought “each and every measure taken to maintain secrecy of each alleged trade secret.” Id. In contrast to the RFPs at issue here, the RFP in Sprint was limited to the trade secrets at issue in the case; it did not seek every measure taken to protect every trade secret companywide. Here, RFP 16 and 17 are overbroad and seek production that is disproportionate to the needs of the case.
C. Interrogatory No. 10; Document Request No. 2
The parties dispute the following discovery requests with respect to vendor, customer, client, and supplier related protection of trade secrets:
Interrogatory No. 10:
Identify all contracts or agreements signed by any and all of Plaintiff's customers, clients, vendors, suppliers or potential customers, clients, vendors, or suppliers that included any type of confidentiality or nondisclosure agreement or provision executed or in effect at any time from January 1, 2010 to the present.
VibrantCare's Response:
VibrantCare o1bjects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad in substance and in time, unduly burdensome, and calling for information not relevant to any claim or defense in this matter. Agreements that VibrantCare may have with third parties are not at issue in this case, and their existence has no relevance to any claim or defense in this case. VibrantCare further objects the timeframe of this interrogatory as unduly burdensome and not reasonably calculated to lead to the discovery of admissible evidence.
Request No. 2:
Any and all docum1ents distributed to Plaintiff's employees, customers, vendors, or suppliers evidencing measures used to prevent disclosure of confidential, proprietary, or trade secret information to competitors or others.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad and not reasonably calculated to lead to the discovery of admissible evidence in that it seeks all documents distributed by VibrantCare to any third-party regarding the protection of any part of VibrantCare's confidential and trade secret information, and is not limited to either Defendant or the confidential and trade secret information at issue in this case. Subject to and without waiving the foregoing objections, VibrantCare will produce reasonably available, non-privileged documents evidencing measures taken by VibrantCare to prevent disclosure of the confidential and trade secret information that Defendant is alleged to have misappropriated in this matter.ECF No. 48 at 10.
Both the dispute and the analysis here echo that above. The Interrogatory and RFP as drafted, seeking any and all information related to any and all trade secrets over a twelve year period, are disproportionate to the needs of the case for the same reasons described above as to Interrogatory No. 5 and its related document requests.
D. Request No. 18
The parties dispute the following request regarding production of employee email communications:
Request No. 18:
As to any witness identified in your initial disclosures, or who you anticipate you may call in this case, any and all email or other communications that they conducted on any VibrantCare owned device or system that they sent to a personal email account or other personal device or system at any time over the last five years.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence. This lawsuit only concerns VibrantCare's enforcement of a confidentiality provision against Defendant. The actions of any other VibrantCare employee, regardless of whether or not identified as a witness, is not relevant to any claim or defense in this matter.ECF No. 48 at 13.
Once again, this request for production is overly broad and disproportionate to the needs of this case. The Request, as drafted, is not limited in scope to communications regarding trade secrets, let alone the particular trade secrets at issue in this case. This Request is not likely to lead to relevant evidence and is excessive to the needs of the case.
E. Interrogatory Nos. 3-4; Request No. 12
The parties dispute the following discovery request regarding information related to plaintiff's other former employees:
Interrogatory No. 3:
Identify all of Plaintiff's former employees who left their employment with Plaintiff at any time from January 1, 2010 to the present to work for competitors of Plaintiff.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited from disclosing under California law. VibrantCare is not seeking to enforce any non-competition restriction against Defendant in this
matter, and a request for information regarding any other employees of VibrantCare who may have joined any competitors at any time in the past decade has no relevance at all to the claims in this lawsuit.
Interrogatory No. 4:
For each former employee identified in response to Interrogatory No. 3, identify when each former employee left his or her employment with Plaintiff, the name of the company subsequently joined, when each former employee was known to start at such company, and what each former employee's job duties are known to be at such company.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited from disclosing under California law. VibrantCare is not seeking to enforce any non-competition restriction against Defendant in this matter, and a request for detailed information on the subsequent job duties of other employees of VibrantCare who may have joined any competitors at any time in the past decade has no relevance at all to the claims in this lawsuit.
Request No. 12:
Any and all documents relating to any other employee or former employee who Plaintiff believes has gone to work for a competitor of VibrantCare within two (2) years of the end of their employment with Plaintiff, including, without limitation, a copy of each such individual's personnel file.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence, calling for private records of unrelated third parties, and calling for information protected from disclosure by California state law. This lawsuit only concerns VibrantCare's enforcement of a confidentiality provision against Defendant. Any dispute that VibrantCare may have had with any other employee is not relevant to any claim or defense in this matter. VibrantCare will not produce the entire personnel files or unrelated third parties.
Here again, the court agrees with VibrantCare that the discovery requests are overly broad and disproportionate to the needs of the case. As drafted, the requests would require plaintiff to do a companywide search and analysis of every employee that left in the last twelve years for any reason, regardless of whether the employee had access to the trade secrets at issue in this case. These requests are overbroad, unduly burdensome, unlikely to lead to relevant evidence on their face, and disproportionate to the needs of the case.
F. Interrogatory Nos. 6-7; Request No. 11
The parties dispute the following discovery requests regarding VibrantCare's communications with other former employees:
Interrogatory No. 6:
Identify each and every communication between Plaintiff and any former employee identified in response to Interrogatory Nos. 3 and 4 upon the commencement, or within six (6) months thereafter, of such former employees' new employment with competitors of Plaintiff, including, but not limited to, cease and desist letters.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited from disclosing under California law. VibrantCare is not seeking to enforce any restrictive covenant against Defendant in this matter other than the confidentiality provision in her agreement with VibrantCare. Any information about VibrantCare's disputes with other former employees, even if such disputes existed, is not relevant to any claim or defense in this matter.
Interrogatory No. 7:
Identify any and all lawsuits commenced against any former employee of Plaintiff for an alleged breach of such former employees' employment agreements or restrictive covenants, breach of the fiduciary duties, or misappropriation of trade secrets, from January 1, 2010 to the present.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited from disclosing under California law. VibrantCare is not seeking to enforce any restrictive covenant against Defendant in this matter other than the confidentiality provision in her agreement with VibrantCare. Any information about VibrantCare's disputes with other former employees, even if such disputes existed, is not relevant to any claim or defense in this matter.
Request No. 11:
Any and all documents relating to any other attempt(s) by Plaintiff to enforce its “VibrantCare Employee Agreement” against any other employee, including, without limitation, copies of any correspondence, demands, complaints, and settlement agreements.
VibrantCare's Response:
VibrantCare objects to this Request as overly broad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence. This lawsuit only concerns VibrantCare's enforcement of a confidentiality provision against Defendant. Any dispute that VibrantCare may have had with any other employee is not relevant to any claim or defense in this matter.ECF No. 48 at 18-19.
Plaintiff states that during meet and confer, it agreed to: (1) amend its response to Interrogatory No. 6 “to confirm that VibrantCare is not aware of any other former employees having misappropriated the information that Deol stole from VibrantCare;” and (2) amend its responses to Interrogatory No. 7 and Request for Production No. 11 “to state that it has not commenced lawsuits against former employees for misappropriating the information that VibrantCare alleges Deol misappropriated.” ECF No. 48 at 20; Westbrook Dec., Ex. C. The court finds this concession reasonable and to the extent the discovery request goes further (e.g., seeking any communications regarding any trade secrets, regardless of whether the trade secrets are at issue in this case), it is overbroad, unduly burdensome, and disproportionate to the needs of this case, for all the same reasons discussed above.
G. Interrogatory Nos. 8-9
Finally, the parties dispute the following interrogatories addressing the sourcing of plaintiff's other employees:
Interrogatory No. 8:
Identify each and every employee of Plaintiff beginning their employment with Plaintiff at any time from January 1, 2010 to the present who came to Plaintiff from a competitor of Plaintiff.
VibrantCare's Response:
VibrantCare objects to this interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, calling for information not relevant to any claim or defense in this matter, and calling for information as to other employees of VibrantCare that VibrantCare is legally prohibited
from disclosing under California law. VibrantCare is not seeking to enforce any restrictive covenant against Defendant in this matter other than the confidentiality provision in her agreement with VibrantCare. The employment history of every other employee of VibrantCare for the past decade, and whether that employee at some point worked for a competitor of VibrantCare, is not relevant to any claim or defense in this matter.
Interrogatory No. 9:
Describe with specificity all measures taken by Plaintiff to ensure Plaintiff does not use any confidential, proprietary, or trade secret information belonging to any other entity that may be in the possession of Plaintiff or Plaintiff's employees.
VibrantCare's Response:
VibrantCare objects to this Interrogatory as not reasonably calculated to the discovery of admissible evidence, overly broad, unduly burdensome, and calling for information not relevant to any claim or defense in this matter. VibrantCare is not the Defendant in this case, there are no allegations that VibrantCare has misappropriated any other party's confidential or trade secret information, and information about what steps VibrantCare takes to ensure that it does not do so has no relevance to any claim or defense in this case.ECF No. 48 at 21-22.
Defendant asserts that these questions go to her defense that plaintiff's claims are barred or diminished by the equitable doctrine of unclean hands. “The doctrine of unclean hands bars relief to a plaintiff who has violated conscience, good faith or other equitable principles in his prior conduct, as well as to a plaintiff who has dirtied his hands in acquiring the right presently asserted.” Seller Agency Council, Inc. v. Kennedy Ctr. for Real Est. Educ., Inc., 621 F.3d 981, 986 (9th Cir. 2010) (quoting Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989)). Defendant summarizes her unclean hands defense as follows: “[t]he degree to which VibrantCare engages in the same activities that it alleges against Ms. Deol (i.e., hiring employees from competitors and using information obtained from its competitors) is relevant to determining the applicability of the affirmative defense. If VibrantCare frequently obtains information about its competitors for their former employees, VibrantCare would be less likely to receive equitable relief.” ECF No. 48 at 22.
As defendant acknowledges, the crux of the unclean hands defense “is not that the plaintiff's hands are dirty, but that he dirtied them in acquiring the right he now asserts, or that the manner of dirtying renders inequitable the assertion of such rights against the defendant.” Republic Molding Corp. v. B.W. Photo Utils., 319 F.2d 347, 349 (9th Cir. 1963). The discovery questions above, as drafted, are aimed at “misconduct in the abstract” rather than misconduct related to the specific claims against defendant, which involve breach of a confidentiality agreement and not simply use of a competitor's information. Asking plaintiff to trace the employment history of all hires in all departments over the past 12, years with the intent of identifying an instance in which an employee was hired from a competitor and brought any trade secret to VibrantCare, is not sufficiently tied to the claims in this case to justify the requested discovery on grounds of a possible unclean hands defense. See, e.g., Medimpact Healthcare Sys., Inc. v. IQVIA Inc., No. 19-CV-1865-GPC-DEB, 2022 WL 126307, at *4 (S.D. Cal. Jan. 13, 2022) (citing Partners, Inc. v. FIGS, Inc., No. 19-cv-2286-GW-KSx, 2020 WL 4354172, *8 (C.D. Cal. May 18, 2020) (“An unclean hands defense, therefore, would allow for discovery as to the controversy at issue, which here, only concerns [defendant's] representations and advertising about its ... products, not [plaintiff's] products or advertising.”)); Winiadaewoo Elecs. Am., Inc. v. Opta Corp., 13-cv-01247-VC-MEJ, 2018 U.S. Dist. LEXIS 121121, *5-6 (N.D. Cal. July 19, 2018) (“Defendant argues that the interrogatory is relevant to its unclean hands defense; however, in order for the interrogatory to be relevant to Defendant's unclean hands defense, ‘the misconduct that brings the [un]clean hands doctrine into play must relate directly to the cause at issue. Past improper conduct or prior misconduct that only indirectly affects the problem before the court does not suffice.'”) (quoting Kendall-Jackson Winery, Ltd. v. Superior Court, 90 Cal.Rptr.2d 743 (1999)). The Interrogatories at issue are overbroad, not likely to result in admissible evidence, and disproportionate to the needs of this case.
IV. Conclusion
For the reasons explained above the motion to compel (ECF No. 46) is DENIED in its entirety.
IT IS SO ORDERED.