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Gabriel Technologies Corporation and Trace Technologies, LLC v. Amicus Brief and Qualcomm Incorporated

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


March 13, 2012

GABRIEL TECHNOLOGIES CORPORATION AND TRACE TECHNOLOGIES, LLC,
PLAINTIFF,
v.
AMICUS BRIEF AND QUALCOMM INCORPORATED, SNAPTRACK, INC. AND NORMAN KRASNER,
DEFENDANTS.

The opinion of the court was delivered by: Hon. Anthony J. BattagliaU.S. District Judge

ORDER OVERRULING OBJECTION [Doc. No 237]; DENYING EX PARTE MOTION FOR LEAVE TO FILE [Doc. No. 234]; DENYING EX PARTE MOTION FOR LEAVE TO FILE REPLY AND REQUEST FOR HEARING [Doc. No. 242] [Doc. Nos. 234, 237 and 242]

Plaintiffs, Gabriel Technologies Corporation and Trace Technologies, LLC filed an objection to the Order Denying Motion to Compel by Magistrate Judge Dembin on December 12, 2011. [Doc. No. 237.] Defendants filed a response to the Plaintiffs' objection. [Doc. No. 241.] Plaintiffs subsequently filed an ex parte motion for leave to file a reply and requesting a hearing on the objection. [Doc. No. 242.] In support of their Objection, Plaintiffs also filed an ex parte motion for leave to file an amicus curiae brief. [Doc. No. 234.] For the reasons set forth below, the Plaintiffs' objection, [Doc. No. 237] is OVERRULED and Plaintiffs' ex parte applications, [Doc. Nos. 234 and 242] are DENIED.

Background

The motions in the current case are the result of a lengthy discovery dispute.*fn1 Plaintiffs have sued Defendants, alleging Defendants misappropriated Plaintiffs' trade secrets which form the foundation of several of the Defendants' patents. Plaintiffs filed a motion to compel discovery on September 6, 2011. [Doc. No. 170.] Magistrate Judge Dembin denied Plaintiffs' motion on December 12, 2011, because Plaintiffs failed to describe their trade secrets with reasonable particularity. [Doc. No. 237.] Plaintiffs filed an Objection to the Order on January 9, 2012, arguing the Court incorrectly applied Cal. Civ. Code § 2019.210 in Federal Court. [Doc. No. 237.] In support of this objection, Plaintiffs filed an ex parte application for a motion for leave to file an amicus curiae brief by Roger Mr. Milgrim. [Doc. No. 237.] Plaintiffs also filed an ex parte motion for leave to file a reply and requesting a hearing on the objection. [Doc. No. 242.] At issue in the present order are the Plaintiffs' objection and ex parte applications.

Legal Standards

Review Pursuant to 28 U.S.C. § 636(b) and Fed. R. Civ. P. 72(a) Magistrate judges may hear and determine pretrial matters pending before the court pursuant to 28 U.S.C. § 636(b). Eight motions are specified within 28 U.S.C. § 636(b)(1)(a) as dispositive, and generally the remaining categories of pre-trial motions are non-dispositive. District court review of magistrate judge orders on non-dispositive motions is limited. A district judge may reconsider a magistrate judge's ruling on a non-dispositive motion only "where it has been shown that the magistrate [judge]'s order is clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 72(a); Grimes v. City and County of San Francisco, 951 F.2d 236, 240 (9th Cir. 1991). "[T]he clearly erroneous standard applies to the magistrate judge's . . . discretionary decisions[.]" SLPR, LLC, 2010 U.S. Dist. LEXIS 89247 at *4 (internal citations and quotations omitted). "Under this standard of review, a magistrate [judge]'s order is 'clearly erroneous' if, after considering all of the evidence, the district court is left with the definite and firm conviction that a mistake has been committed, and the order is 'contrary to law' when it fails to apply or misapplies relevant statutes, case law or rules of procedure." Yent v. Baca, 2002 WL 32810316, at *2 (C.D. Cal. 2002).

Discovery orders are ordinarily considered non-dispositive because they do not have the effect of dismissing a cause of action. Maisonville v. F2 Am., Inc., 902 F.2d 746, 748 (9th Cir. 1990). Due to discovery motions' non-dispositive nature, decisions by a magistrate judge regarding the scope and nature of discovery are "afforded broad discretion." Brighton Collectibles, Inc. v. Marc Chantal USA, , 2008 U.S. Dist. LEXIS 21530, *2 (S.D. Cal. March 18, 2008). Accordingly, a district court may reconsider a magistrate judge's ruling on a discovery motion under the appropriate clearly erroneous or contrary to law standard. Under this standard, a district court overturns a magistrate judge's ruling only if the district court finds, with firm conviction, a mistake was made or that the magistrate judge misinterpreted or misapplied the appropriate law.*fn2 "This essentially amounts to an abuse of discretion standard." SLPR, LLC v. San Diego Unified Port Dist., 2010 U.S. Dist. LEXIS 89247 at *4 (S.D. Cal. August 27, 2010). "The reviewing court may not simply substitute its judgment for that of the deciding court." Grimes, 951 F.2d at 241.

Discussion

Plaintiffs' object to Magistrate Judge Dembin's Order Denying Motion to Compel on two grounds. The Plaintiffs argue: (1) that the Court incorrectly applied a state law of procedure in federal court and (2) that the Court incorrectly found that Plaintiffs did not describe their trade secrets with reasonable particularity pursuant to Cal. Civ. Code § 2019.210. As a preliminary matter, the Court will first determine the appropriate standard of review.

Nature of the Magistrate Judge's Order

In their objections, Plaintiffs argue that the Court should review Magistrate Judge Dembin's order de novo, because it has the effect of a dispositive order. Plaintiffs contend that the "Court's rejection of Gabriel's trade secret designations would preclude any discovery into those claims and deprive Plaintiffs of vital evidence needed to prove such claims." Id. While Plaintiffs' correctly point out that the effect of the ruling needs to be analyzed in order to determine whether or not the ruling is dispositive, the Court finds Plaintiffs' analysis of Magistrate Judge Dembin's order mischaracterizes the order and applicable standard of review.

This court finds Magistrate Judge Dembin's Order Denying Plaintiffs' Motion to Compel to be a non-dispositive determination. [Doc. No. 170.] The Order denying Plaintiffs' motion to compel is not dispositive of Plaintiffs' trade secret claim, because Judge Dembin is not determining the merits of the trade secret, rather he is pointing out that the description of the trade secret has not been adequately articulated to meet the sufficient particularity standard.*fn3 [Doc. No. 229, at 8.] Pursuant to Cal. Civ. Code § 2019.210, the Plaintiffs must identify their trade secret(s) with reasonable particularity before they are entitled to discovery. It is the Plaintiffs' inability and repeated failure to articulate their trade secrets in compliance with § 2019.210, despite seven separate opportunities over the course of this case, which led to Magistrate Judge Dembin's Order denying the Plaintiff's motion to compel additional discovery.

Based upon the foregoing, the Court finds Magistrate Judge Dembin's Order is a discovery order that is non-dispositive. Maisonville v. F2 Am., Inc., 902 F.2d 746, 748 (9th Cir. 1990). Magistrate Judge Dembin's decision to deny the Plaintiff's motion to compel should be afforded broad discretion. Brighton Collectibles, Inc. v. Marc Chantal USA, Inc., 2008 U.S. Dist. LEXIS 21530, *2 (S.D. Cal. March 18, 2008). Accordingly, this Court will review Magistrate Judge Dembin's Order under the clearly erroneous and contrary to law standard.*fn4 Under this standard, a district court overturns a magistrate judge's ruling only if the district court finds, with firm conviction, a mistake was made or that the magistrate judge misinterpreted or misapplied the appropriate law.

Magistrate Judge's Ruling that the Plaintiff Failed to Describe Their Trade Secrets With Reasonable Particularity

The Plaintiffs contend that Magistrate Judge Dembin incorrectly found that Plaintiffs did not describe their trade secrets with reasonable particularity pursuant to Cal. Civ. Code § 2019.210.

The California Code of Civil Procedure § 2019.210 requires that a party alleging misappropriation of a trade secret must, before commencing discovery relating to the trade secret, identify the trade secret with "reasonable particularity." Upon review of the Plaintiffs' descriptions, this Court concurs with Magistrate Judge Dembin's ruling that the descriptions of the trade secret's design approach are too vague to allow for the additional discovery requested by the Plaintiffs,*fn5 which itself has not been articulated with any level of specificity.*fn6 Based upon the foregoing, the Court finds Magistrate Judge Dembin exercise of his discretion to limit the scope of discovery where the description of the trade secret has not been adequately articulated to meet the sufficient particularity standard was not clearly erroneous or contrary to law.

Plaintiff's Objection to the Application of California Civil Code § 2019.210 in Federal Court The Plaintiffs argue that the Court incorrectly applied a state law of procedure in federal court.*fn7

When questions of state law are raised in federal court, the federal court must apply state substantive law and federal procedural law. Erie R.R., 304 U.S. 64, 78 (1938).In the current case, the issue then becomes whether Cal. Civ. Code § 2019.210is a substantive or a procedural law. Computer Economics, Inc. v. Garter Group, Inc., 50 F. Supp. 2d 980, 986 (S.D. Cal 1999). The answer to this question lies in a two part test where the court must determine if the state rule conflicts with an applicable Federal Rule of Civil Procedure and if it does, the court must apply the federal rule, but if it does not, the court must analyze whether failure to apply the state law would significantly affect the outcome of the litigation or encourage litigants to forum shop and file their actions in federal court. Id.

Applying the Erie Doctrine to the specific issue at hand, the court in Computer Economics, Inc. found that Rule 26 of the Federal Rules of Civil Procedure does not run into conflict with Cal. Civ. Code § 2019.210,because the federal rule actually assists the Court in defining the appropriate scope of discovery. Computer Econ, Inc. v. Gartner Group, Inc., 50 F. Supp. 2d 980, 989 (S.D. Cal. 1999). A federal rule does not conflict with state law because both rules impose a similar or overlapping requirement, as is the case with Fed. R. Civ. Pro. 26 andCal. Civ. Code § 2019.210. Id. at 987. A federal rule is "sufficiently broad" to control the question before the court when an application of a state law would frustrate the purpose behind the federal rule. Id.

In the present case, if the court were to allow the state rule to be applied, this would not frustrate the purpose of the federal rule, rather it would further the purpose of preventing forum shopping. Id. at 991. When a state rule is not clearly substantive, the Erie doctrine requires the court to analyze the possible effect non-application of the rule would have on the outcome of the litigation and to apply the state rule if the effect would encourage forum shopping, significantly affect the outcome of the litigation or result in inequitable administration of the laws. Id. As in Computer Economics, not applying Cal. Civ. Code § 2019.210in this case undoubtedly would influence Plaintiffs' choice of a forum,*fn8 and has the potential to affect the outcome of the case. ApplyingCal. Civ. Code § 2019.210 "strikes a balance between a plaintiff's right to protect its trade secrets and a defendant's right to be free from the burdens associated with unsupported trade secrets claims." Id. at 992.

As set forth above, under Erie R.R., it is appropriate to apply Cal. Civ. Code § 2019.210 in a federal court sitting in diversity, because § 2019.210 does not conflict with a federal rule, is a substantive state law and even if that were questionable, which it is not, its non-application would result in undesirable forum shopping. Erie R.R., 304 U.S. 64, 78 (1938). Based upon the foregoing, the Court finds Magistrate Judge Dembin application of § 2019.210 in federal court was not clearly erroneous or contrary to law.

Plaintiffs' Ex-Parte Motion for Amicus Curiae Brief

District courts have discretion to accept amicus briefs from non-parties concerning legal issues that have possible ramifications beyond the parties directly involved in the case or if the amicus has "unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide." Ryan, 125 F.3d at 1064. An amicus brief is meant to assist the court and not merely extend the length of the litigant's brief. See Ryan v. Commodity Futures Trading Com'n (7th Cir. 1997) 125 F.3d 1062, 1063. An amicus brief is normally allowed only when a party is not represented competently or is not represented at all, and when the amicus has an interest in another case that may be affected by the holding in the present case, or when the amicus can present unique information that can help the court in a way that is beyond the abilities the lawyers for the parties are able to provide. See Id. If these limitations to filing an amicus brief are not met, then the motion should be denied. Rucker v. Great Scott Supermarkets, 528 F.2d 393 n.2 (6th Cir.1976); Strasser v. Doorley, 432 F.2d 567, 569 (1st Cir.1970).

Plaintiffs have filed an ex parte application seeking leave to file an amicus brief by Robert M. Milgrim. Mr. Milgrim is a private practitioner and the author of "Milgrim on Trade Secrets." [Doc. No. 234, at 1.] Mr. Milgrim states that the outcome of the Plaintiffs' motion to compel has the potential to burden and discourage trade secret litigation in federal court, and therefore has the potential of adversely affecting his economic interest in selling his book and being called as an expert witness in trade secret trials. [Doc. No. 234, at 2.] Among the issues Mr. Milgrim lists within his brief, some are irrelevant to the motion before the court, such as his bond argument within his conclusion. [Doc. No. 234, at 5.] Mr. Milgrim's primary argument is, at best, just an echoing of Plaintiffs' original objection to the denial of the motion to compel. [Doc. No. 234-2, at 2.] Mr. Milgrim focuses on the issue of the application of Cal. Civ. Code § 2019.210 in federal court, which has already been raised by Plaintiffs' as the first argument in their objection. [Doc. No. 237, at 7; Doc No. 234-2, at 2.] Mr. Milgrim does not add a unique perspective or knowledge on this issue and his opinion appears at odds with that set forth previously by him in his text, Milgrim on Trade Secrets.*fn9 The Court finds Mr. Milgrim's reference to cases and analysis are generally biased*fn10 and do not rise above the capabilities of Plaintiffs' counsel.

Mr. Milgrim's stated interest in this case seems too far removed from the current issue and his arguments unfairly provide support to the Plaintiffs by ignoring key cases that support the Defendants arguments, such as Computer Economics, Inc. v. Garter Group, Inc., 50 F. Supp. 2d 980 (S.D. Cal 1999). Based upon Mr. Milgrim's lack of unique information or perspective and repetition of Plaintiffs' previous arguments, the Court finds his amicus brief unnecessary and unhelpful. As such, the Plaintiffs ex parte motion for leave to file an amicus curiae brief is DENIED.

Conclusion

For the reasons set forth above, the Plaintiffs' Objection to the Order Denying Motion to Compel is hereby OVERRULED and the Plaintiffs' ex-parte applications for Motion for Leave to File an Amicus Curiae and Motion for Leave to File Reply*fn11 and Request for Hearing are hereby DENIED. [Doc. Nos. 234, 237 and 242.]

IT IS SO ORDERED.


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