Opinion
No. 3:20-cv-02182-YY
2024-01-25
Grover WICKERSHAM, Plaintiff, v. EASTSIDE DISTILLING, INC., a Nevada corporation, Does 1-30, Defendants.
Brad C. Stanford, Kimberley Hanks McGair, Farleigh Wada Witt, PC, Portland, OR, Kevin W. Isaacson, Pro Hac Vice, Michael J. Ioannou, Pro Hac Vice, Paula Nystrom, Pro Hac Vice, Ropers Majeski PC, San Jose, CA, for Plaintiff. Julie Bardacke Haddon, Gordon Rees Scully Mansukhani LLP, Portland, OR, Peder A. Rigsby, Laura Caldera Loera, Bullivant Houser Bailey, Portland, OR, Stephen J. Murphy, Chock Barhoum LLP, Portland, OR, for Defendant Eastside Distilling, Inc.
Brad C. Stanford, Kimberley Hanks McGair, Farleigh Wada Witt, PC, Portland, OR, Kevin W. Isaacson, Pro Hac Vice, Michael J. Ioannou, Pro Hac Vice, Paula Nystrom, Pro Hac Vice, Ropers Majeski PC, San Jose, CA, for Plaintiff.
Julie Bardacke Haddon, Gordon Rees Scully Mansukhani LLP, Portland, OR, Peder A. Rigsby, Laura Caldera Loera, Bullivant Houser Bailey, Portland, OR, Stephen J. Murphy, Chock Barhoum LLP, Portland, OR, for Defendant Eastside Distilling, Inc.
ORDER
HERNÁNDEZ, District Judge
On September 14, 2023, Magistrate Judge Youlee Yim You issued a non-dispositive Opinion and Order denying Defendant's Motion to Disqualify Counsel and Revoke Pro Hac Vice status and granting in part and denying in part Defendant's Motion for Protective Order. ECF 71. On September 28, 2023, Plaintiff filed amended
objections to the Opinion and Order, ECF 73. The matter is now before the Court pursuant to Federal Rule of Civil Procedure 72(a).
In accordance with Rule 72(a), "[w]hen a pretrial matter not dispositive of a party's claim or defense is referred to a magistrate judge to hear and decide, the magistrate judge must promptly conduct the required proceedings and, when appropriate, issue a written order stating the decision." Fed. R. Civ. P. 72(a). The standard of review for an order with objections is "clearly erroneous" or "contrary to law." 28 U.S.C. § 636(b)(1)(A) (applying the "clearly erroneous or contrary to law" standard of review for non-dispositive motions). If a ruling on a motion is not determinative of "a party's claim or defense," it is not dispositive and, therefore, is not subject to de novo review as are proposed findings and recommendations for dispositive motions under 28 U.S.C. § 636(b)(1)(B).
I. Unobjected to Portion of the Opinion and Order
Defendant Eastside Drilling ("EDI") does not object to that portion of the Opinion and Order granting its request for an order quashing or limiting multiple subpoenas issued by Plaintiff to the extent that Judge You "allow[ed] the third parties to withhold documents based on an objectively reasonable assertion of attorney-client privilege or attorney work product protection." O&O at 27. The Court does not find the decision on this ruling is clearly erroneous or contrary to law. The Court, therefore, affirms this portion of the Opinion and Order.
II. Motion to Disqualify and Revoke Pro Hac Vice Status
EDI objects to the decision to deny the Motion to Disqualify and Revoke Pro Hac Vice Status as well as the rest of the decision on the Motion for Protective Order.
The decision to disqualify counsel is "within the sound discretion of the court." Roberts v. Legacy Meridian Park Hosp., Inc., No. 3:13-cv-01136-SI, 2014 WL 294549, at *17 (D. Or. Jan. 24, 2014)(citing Gas-A-Tron of Az. v. Union Oil. Co. of Cal., 534 F.2d 1322, 1325 (9th Cir. 1976)). Motions to disqualify are subject to "particularly strict judicial scrutiny." Optyl Eyewear Fashion Int'l Corp. v. Style Companies, Ltd., 760 F.2d 1045, 1050 (9th Cir. 1985). The Court has carefully considered EDI's objections to the denial of its Motion to Disqualify and Revoke Pro Hac Vice Status and concludes they do not provide a basis to modify the Opinion and Order.
III. Motion for Protective Order — ESI Protocol
EDI objects to the portion of the Opinion and Order denying EDI's request to require the parties to enter into an ESI protocol. The Court has carefully considered EDI's objections to this portion of the Opinion and Order and concludes they do not provide a basis to modify the Opinion and Order as to the request for an ESI protocol.
IV. Motion for Protective Order — Return of Documents
EDI objects to the portion of the Opinion and Order denying EDI's request for an order requiring Plaintiff to return the privileged documents he retained from EDI and precluding Plaintiff from using any of EDI's privileged documents that he retained.
A. Standards
"Under Federal Rule of Evidence 501, federal common law generally governs
claims of privilege, but "in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision." Wilcox v. Arpaio, 753 F.3d 872, 876 (9th Cir. 2014)(citing Fed. R. Evid. 501). In his First Amended Complaint Plaintiff alleges only state-law claims. The Court, therefore, looks to Oregon attorney-client privilege law set out in Or. Rev. Stat. § 40.225(2)(OEC 503(1)(A)), which provides in pertinent part:
A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client:
(a) Between the client or the client's representative and the client's lawyer or a representative of the lawyer;
* * *
(c) By the client or the client's lawyer to a lawyer representing another in a matter of common interest;
(d) Between representatives of the client or between the client and a representative of the client;
(e) Between lawyers representing the client[.]
"Client" is defined as "[a] ... corporation ... or entity ... who is rendered professional legal services by a lawyer, or who consults a lawyer with a view to obtaining professional legal services from the lawyer." Or. Rev. Stat. § 40.225(1)(a). Attorney-client privilege attaches to both individuals and corporations. Upjohn Co. v. U.S., 449 U.S. 383, 390, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The Supreme Court has noted that the administration of the attorney-client privilege in the case of corporations presents "special problems." Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985). "'As fictitious entities, corporations can seek and receive legal advice and communicate with counsel only through individuals empowered to act on behalf of the corporation.'" United States v. Graf, 610 F.3d 1148, 1159 (9th Cir. 2010)(quoting Admiral Ins. Co. v. U.S. Dist. Court, 881 F.2d 1486, 1492 (9th Cir. 1989)). Thus, although § 40.225(3) provides the attorney-client privilege "may be claimed by the ... representative of a corporation," any "privilege that exists as to a corporate officer's role and functions within a corporation belongs to the corporation, not the officer.'" Graf, 610 F.3d at 1159 (quoting In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124 (3d Cir. 1986)).
When "a party establishes that a communication falls within [the] bounds [of § 40.225], then the privilege protects the communication from compelled disclosure unless an exception ... applies to permit access to the communication" Longo v. Premo, 355 Or. 525, 535, 326 P.3d 1152 (2014). When a party has "a privilege to prevent the disclosure of confidential communications[,]... the ... court ha[s] a legal duty to prevent the disclosure of those communications not reasonably necessary to serve the limited purposes of [an] exception." Crimson Trace Corp. v. Davis Wright Tremaine LLP, 355 Or. 476, 542, 326 P.3d 1181 (2014).
B. Analysis
The Opinion and Order correctly concluded that Oregon Rule of Professional Conduct ("OPC") 4.4(b) and Oregon State
OPC 4.4(b) provides: "[a] lawyer who receives a document or electronically stored information relating to the representation of the lawyer's client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender." Emphasis added. The electronically stored information at issue was not inadvertently provided by Plaintiff. Rather, Plaintiff knowingly provided the documents to Ropers Majeski.
Bar Board of Governor's Opinions Nos. 2005-150 and 2011-186 do not resolve or control the circumstances here. Those and other opinions, however, make clear that Oregon's ethics rules are not the only source of guidance for a court's authority to require a party to return privileged documents. For example, the annotations to ABA Rule of Professional Conduct ("RPC") 4.4(b), from which OPC 4.4(b) is taken, state that although 4.4(b) does not require an attorney to return the document, "other laws — which would include rules of evidence and procedure as well as data privacy laws — may create additional obligations." 4.4 Respect for Rights of Third Persons, Ann. Mod. Rules Prof. Cond. § 4.4. That annotation specifically points to FRCP 26(b)(5)(B), which provides:
If information produced in discovery is subject to a claim of privilege ... the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim.
Op. 2005-150 notes OPC 4.4 applies only to inadvertent production, but points out that OPC 4.4 also references other OPCs to consider when "applicable court rules, stipulations or court orders, or substantive law require a lawyer to return documents[.]" Id., at 2. In those circumstances "a lawyer who does not do so would be subject to discipline or disqualification on other grounds." Id. (citing OPC 8.4(a)(4), which prohibits "conduct that is prejudicial to the administration of justice" and Richards v. Jain, 168 F Supp 2d 1195 (W.D. Wash. 2001)(disqualifying counsel for retaining and using privileged materials)). Like Op. 2005-150, Op. 2011-186 notes that although OPC 4.4(b) did not apply there because the production was not inadvertent,
the documents may be entitled to protection under substantive law of privilege or otherwise. See Burt Hill, Inc. v. Hassan, 2010 WL 419433 at *1-5 & n. 6 (2010). The scope and application of those substantive-law protections are not questions of professional responsibility. However, a lawyer who reviews, retains, or attempts to use privileged documents may be subject to disqualification or other sanctions under applicable court rules or substantive law.
Id. at 3 (citing Richards v. Jain, 168 F. Supp. 2d 1195 (W.D. Wash. 2001)(other citation omitted)).
The Opinion and Order found that neither Op. 2005-150 nor 2011-186 provide useful guidance because both opinions rely on Richards, which, in turn, relied on withdrawn ABA Formal Ethics Opinion 94-382. The Court disagrees. In Richards the employer-defendant moved for disqualification of the law firm representing the former employee-plaintiff on the basis that the plaintiff deliberately produced privileged materials to his law firm and the law firm retained access to the materials without disclosing that it had the materials or ceasing review of the materials. The court granted the motion relying on Op. 94-382. Although Op. 94-382 was withdrawn by ABA Formal Ethics Opinion 06-440, that
opinion makes clear that Op. 94-382 was not withdrawn on the basis that an attorney is free to view and to use possibly privileged documents, rather in Op. 06-440 it was noted that Op. 94-382 "found no basis in the [ABA Ethics] Rules for requiring the lawyer to return the materials to their rightful owner or even to forbid their use." Op. 06-440 noted the "Committee was influenced [in Op. 94-382] by principles involving the protection of confidentiality, the inviolability of the attorney-client privilege, ... and general considerations of common sense, reciprocity, and professional courtesy," but "[a]pplication of other law is beyond the scope of the [Ethics] Rules." Op. 06-440 then stated that the Ethics "Rules do not exhaust the moral and ethical considerations that should inform a lawyer." Id.
In addition, cases decided after the ABA withdrew Op. 94-382 continue to find that in the exercise of their inherent authority courts may require the return or nonuse of documents obtained outside the discovery process. For example in Kyko Glob. Inc. v. Prithvi Info. Sols. Ltd., No. C13-1034 MJP, 2014 WL 2694236, at *2 (W.D. Wash. June 13, 2014), the court noted that the defendant's motion was "based on a case applying an old version of the model ethical rules and an outdated ABA opinion." Id. (citing Op. 94-382 and Richards). The court noted that "[t]he current version of RPC 4.4 does not require return of inadvertently sent documents," but "when a party wrongfully obtains documents outside the normal discovery process, a court may impose sanctions including 'dismissal of the action, the compelled return of all documents, [and] restrictions regarding the use of the documents at trial ....'" Id. (quoting Lynn v. Gateway Unified Sch. Dist., No. 2:10-CV-00981-JAM-CMK, 2011 WL 6260362, *5 (E.D. Cal. Dec. 15, 2011), and citing Niceforo v. UBS Glob. Asset Mgmt. Americas, Inc., 20 F. Supp. 3d 428, 432 (S.D.N.Y. 2014)(courts have the "inherent authority to sanction a party who attempts to use in litigation material improperly obtained outside the discovery process.")).
Similarly, in Burt Hill, Inc. v. Hassan , No. CIV.A. 09-1285, 2010 WL 419433 (W.D. Pa. Jan. 29, 2010), defense counsel received two sets of documents "at least some of [which were] on their face, covered by [the] plaintiff's attorney-client privilege," from an "anonymous source." Id. at *3. The plaintiff moved to prohibit the defendants' use of the "anonymous source" documents. The court noted ABA RPC 4.4(b) did not apply because "the 'production' in question ... was not 'inadvertent,' but rather intentional and unauthorized." Id. But it also noted "Rule 4.4(b)... begs the question whether attorneys and/or judicial officers must, under the circumstances, throw up their hands and conclude that nothing can or should be done to protect or ameliorate the document owner's privilege and confidentiality interests." Id., at *4. The court found the "justifications underlying the protections afforded to inadvertent productions ... apply with even greater, and stricter, force in connection with advertent but unauthorized disclosures." Id. The court concluded "an invocation of its inherent sanctioning power [was] warranted" and "prohibit[ed] Defendants and their lawyers from in any way benefiting from their retention and review of Plaintiff's privileged and confidential materials." Id., at *7. The court explained "Defendants and their counsel were discontent with waiting until the carefully constructed rules and procedures governing the discovery of relevant, non-privileged materials had run their course," and it was "deeply troubled by the direction in which Defendants and their counsel have taken this litigation." Id., at *8. "'[M]embers of the bar [and] the public'
should not be required to endure 'the nagging suspicion that [parties'] trial preparation and presentation of their case ha[ve] benefitted from confidential information obtained' outside proper channels." Id. (quoting Richards, 168 F. Supp. 2d at 1209). "'The dynamics of litigation are far too subtle, the attorney's role in that process is far too critical, and the public's interest in the outcome is far too great to leave room for even the slightest doubt concerning the ethical propriety of a lawyer's [actions] in a given case.'" Id. (quoting Richards, 168 F. Supp. 2d at 1209). The court, therefore, ordered defense counsel to, among other things, "immediately return to Plaintiff all copies of the [relevant] Documents within their possession and ... ensure the destruction of any copies in their clients' possession, as well as those copies in the possession of any other persons to whom the Defendants or their counsel have provided the [relevant] Documents." Id., at *9.
In short, although OPC 4.4(b), Op. 2005-150, and 2011-186 do not govern the circumstances here, they indicate that other considerations such as attorney-client privilege, agreements, or other substantive law may provide a basis for a court's exercise of its inherent power to require a party who receives privileged documents outside the discovery process to return the documents or to prohibit the party from using those documents.
The Opinion and Order finds that the "unique factual circumstances here" counsel against requiring Plaintiff to return the contested documents. The Opinion and Order notes EDI permitted executives, including Plaintiff, to use their personal email addresses for company business, and finds that fact distinguishes this case from cases in which documents were intentionally removed from a company's computer or email system in anticipation of litigation as in Richards, or where the plaintiff in a wrongful termination suit unlocked [her supervisor's] desk, stole an attorney-client privileged document discussing the reasons for her termination along with other confidential files, and provided copies of those documents to her attorney." O&O at 13 (citing Furnish v. Merlo, No. 3:93-cv-01052-AS, 1994 WL 574137, at *2 (D. Or. Aug. 29, 1994)). The Court disagrees. Plaintiff here was subject to a Code of Conduct that provided in pertinent part:
In carrying out the Company's business, employees, officers, and directors may learn confidential or proprietary information about the Company or third parties. Employees, officers and directors must maintain the confidentiality of all information entrusted to them, except when disclosure is authorized or legally mandated .... Employees, officers and directors are required to secure from unauthorized access and public view documents under their control that contain confidential or proprietary information.
* * *
In addition, employees, officers, and directors are prohibited from taking confidential or proprietary information with them upon termination of employment with the Company or from using or disclosing such information for any purpose elsewhere, including with a different employer or company. Any confidential or proprietary information must be promptly returned to the Company upon termination of employment or affiliation with the Company.
Loera Decl., ECF 40, Ex. 3, ¶ VII. Plaintiff, therefore, was explicitly required to maintain the confidentiality of all information entrusted to him as an executive of EDI, prohibited from taking confidential information with him on termination, and required to return confidential information
on termination. Plaintiff, however, provided some privileged information to his personal counsel with Ropers Majeski while he was still an executive with EDI, failed to return the confidential information to EDI on termination, and provided privileged information to Ropers Majeski after he was terminated. The Opinion and Order suggests EDI "should have exercised more control over its documents" and been "more vigilant in attempting to enforce its Code of Conduct and demand Plaintiff return documents upon his termination," but the Code of Conduct requires no such action by EDI. The Code of Conduct makes it incumbent on the executive to comply with its terms.
The Opinion and Order also states that much of the parties' briefing focused on EDI's rights of attorney-client privilege, but points out that Plaintiff "is also entitled to the benefits of legal representation and the privilege that comes with it." O&O at 16. The Opinion and Order states: "[i]t is not disputed that as defendant's onetime CEO and board member, plaintiff was authorized to access privileged information about the company." When "the relationship started to sour, plaintiff had the right to seek representation from a lawyer to protect his own interests, and as a part of that lawyer-client relationship, plaintiff should, and in fact must, be allowed to discuss with his own attorneys the full facts and circumstances surrounding the dispute with defendant." O&O at 16. It is undisputed that during his tenure as an executive of EDI Plaintiff was authorized to have access to EDI's privileged information. In addition, EDI does not appear to assert that Plaintiff cannot talk to his personal counsel about the circumstances of his termination. At issue is whether Plaintiff and Ropers Majeski can retain and use privileged documents obtained outside of discovery.
i. Provision of Privileged Documents to Ropers Majeski While Plaintiff was a Director at EDI
EDI asserts eleven of the 598 documents on the privilege log are emails that Plaintiff improperly provided to Ropers Majeski while Plaintiff was an executive at EDI. Plaintiff asserts EDI waived the attorney-client privilege as to these documents because at the time Plaintiff provided his personal counsel with these emails, Plaintiff was an executive of EDI and, as such, he had the authority to waive the privilege on behalf of EDI. According to Plaintiff, therefore, Plaintiff may retain and use the contested documents in this litigation. This argument is not well taken.
Plaintiff asserts EDI waived attorney-client privilege as to these documents for number of other reasons, which are addressed in the Opinion and Order.
Or. Rev. Stat. § 40.280 provides that waiver occurs when the "holder of the privilege voluntarily discloses or consents to disclosure of any significant part of the matter or communication." In Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985), the Supreme Court held that "for solvent corporations, the power to waive the corporate attorney-client privilege rests with the corporation's management and is normally exercised by its officers and directors." The Court then stated, however, that "[t]he managers, of course, must exercise the privilege in a manner consistent with their fiduciary duty to act in the best interests of the corporation and not of themselves as individuals." Id. at 349, 105 S.Ct. 1986. As noted, EDI had a Code of Conduct that applied to Plaintiff and that mandated Plaintiff, as an executive of EDI, "secure from unauthorized access and public view documents under [his] control that contain confidential or
proprietary information." Loera Decl., Ex. 3, ¶ VII. Plaintiffs provision of these emails to Ropes Majeski violated Plaintiff's duties to EDI under the Code of Conduct as well as Plaintiff's general fiduciary duty to act in the best interests of EDI rather than in his individual interest. Plaintiffs provision of these emails to Ropers Majeski, therefore, did not waive EDI's attorney-client privilege.
ii. Plaintiff's Provision of Attorney Client Documents After Employment
Plaintiff also provided hundreds of allegedly privileged documents to Ropers Majeski after Plaintiff was no longer an executive of EDI. EDI's current officers and directors have the authority to assert attorney-client privilege as to the contested documents and the authority to attempt to prevent use of those documents by Plaintiff because the contested documents were created or received by Plaintiff when he was acting in his capacity as an executive of EDI rather than in his individual capacity. As noted, "any privilege that exists as to a corporate officer's role and functions within a corporation belongs to the corporation, not the officer." Graf, 610 F.3d at 1159 (quotation omitted). The privilege as to the contested documents, therefore, belongs to EDI and can be waived only by EDI. As the court noted in Las Vegas Sands v. Eighth Jud. Dist. Ct., "[a]llowing a former fiduciary of a corporation to access and use privileged information after he or she becomes adverse to the corporation solely based on his or her former Fiduciary role is entirely inconsistent with the purpose of the attorney-client privilege." 130 Nev. 643, 655, 331 P.3d 905 (2014). Doing so would "have a perverse chilling effect on candid communications between corporate managers and counsel." Id. See also Davis v. PMA Cos., Inc., No. CIV-11-359-C, 2012 WL 3922967, at *6 (W.D. Okla. Sept. 7, 2012)("It seems paradoxical to allow a party to access information previously available to that individual only because of his or her role as a fiduciary once that party is adverse to the corporation and no longer required to act in the corporation's best interests."). See also Weintraub, 471 U.S. at 348-49, 105 S.Ct. 1986 (for solvent corporations, the power to waive attorney-client privilege rests with the corporation's current officers and directors because "when control of a corporation passes to new management, the authority to assert and waive the corporation's attorney-client privilege passes as well." Thus, "[d]isplaced managers may not assert the privilege over the wishes of current managers, even as to statements that the [displaced managers] might have made to counsel concerning matters within the scope of their corporate duties" and a former officer "who is now neither an officer nor a director . . . retains no control over the corporation's privilege.").
EDI asserts attorney-client privilege as to these documents and contends Plaintiff provided them to Ropers Majeski in violation of the Code of Conduct. The Opinion and Order states EDI "does not meaningfully dispute that it never demanded that plaintiff return the contested documents until sometime in 2023, after plaintiff produced the contested documents from his personal email account," and, as a result Plaintiffs failure to comply with the Code of Conduct is irrelevant in deciding this matter. O&O at 14. As noted, however, the Code of Conduct does not require EDI to request an employee who had been terminated return documents. Rather, it mandates employees not "tak[e] confidential or proprietary information with them upon termination of employment with the Company" and return "[a]ny confidential or proprietary information . . . to the Company
upon termination of employment or affiliation with the Company." In addition, although "it was no secret that plaintiff used his personal email account for conducting company business," there is no indication that EDI had any basis to assume Plaintiff would not adhere to the Code of Conduct and would provide privileged documents to his personal counsel after his termination.
As to the contention that Plaintiff must be allowed to discuss the facts surrounding his dispute with EDI with his own attorneys, as noted, EDI does not appear to assert that Plaintiff cannot talk to his personal counsel about the circumstances of his termination. The cases on which the Opinion and Order relies, however, do not support the conclusion that Plaintiff's right to discuss the facts surrounding his termination extends to the right to provide EDI's privileged documents to Plaintiff's counsel. For example, Layer2 Commc'ns Inc. v. Flexera Software LLC, No. 4:13-cv-02131-DMR, 2014 WL 2536993 (N.D. Cal. June 5, 2014) specifically differentiated the circumstances of that case from the circumstances in Packard Bell NEC, Inc. v. Aztech Sys. LTD, No. CV 98-7395 DT(EX), 2001 WL 880957 (C.D. Cal. Jan. 22, 2001), in which "the ex-employee who disclosed the confidential information of his former corporation was a senior level employee who owed a fiduciary duty to his former corporation not to disclose its confidences." 2014 WL 2536993, at *8 (emphasis in Layer2). The circumstances here are like those in Packard Bell rather than those in Layer2 because Plaintiff was an senior executive of EDI and in that capacity he had a fiduciary duty to EDI not to disclose its confidences. In addition, two of the California cases relied on in the Opinion and Order in which courts held "a party cannot improperly disclose confidential information to one's own counsel in the prosecution of one's own lawsuit" because barring such discussions "would defeat the purpose of confidentiality, which is to promote full and open discussions between attorney and client" were decided before the California Court of Appeals' decision in Clark v. Superior Court, 196 Cal. App.4th 37, 125 Cal.Rptr.3d 361 (2011). O&O at 16 (quoting Neal v. Health Net, Inc., 100 Cal. App. 4th 831, 844, 123 Cal.Rptr.2d 202 (2002); and citing Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294, 302-04, 106 Cal.Rptr.2d 906 (2001)). The court in the third case, Preston v. City of Oakland, No. 3:14-cv-02022-NC, 2015 WL 577427, at *4 (N.D. Cal. Feb. 11, 2015), the court specifically stated it was "distinguishable from Clark. 2015 WL 577427.
In summary, Plaintiff retained documents contrary to the Code of Conduct and provided documents he received or sent in his capacity as an executive of EDI to his personal counsel in violation of his fiduciary duties to EDI. Under these circumstances the Court concludes it was clear error to deny the portion of EDI's Motion for Protective Order that requests an order requiring Plaintiff to return the contested documents and preventing Plaintiff from using the contested documents at this point in the case. Accordingly, the Court directs Plaintiff and Ropers Majeski to return all contested documents to EDI. The parties may then conduct discovery as to these and other documents pursuant to the Rules of Civil Procedure including requests for production, production under appropriate protective orders, assertions of privilege, and evaluation of claims of privilege. Plaintiff may not use documents he retained in violation of the Code of Conduct or that he retained or provided to Ropers Majeski outside the discovery process unless those documents are produced in the usual course of discovery.
CONCLUSION
The Court AFFIRMS in part and MODIFIES in part Magistrate Judge You's Order, ECF 71 as follows: 1. The Court affirms the denial of Defendant's Motion to Disqualify Counsel and Revoke Pro Hac Vice Status, ECF 48;
2. The Court affirms the denial of the portion of Defendant's Motion for Protective Order, ECF 50, in which Defendant requests an order requiring the parties to enter into an ESI protocol;
3. The Court affirms the portion of the Opinion and Order granting in part and denying in part that portion of Defendant's Motion for Protective Order in which Defendant seeks an order quashing or limiting multiple subpoenas issue by Plaintiff;
4. The Court modifies the portion of the Opinion and Order denying that portion of Defendant's Motion for Protective Order in which Defendant requests an order requiring Plaintiff to return the contested documents to EDI and preventing Plaintiff from using the contested documents. The Court grants this portion of Defendant's Motion as set out in this Order.
IT IS SO ORDERED.