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Cavner v. Airborne Systems North America of CA, Inc.

United States District Court, S.D. California

April 28, 2017

STEVE CAVNER and BETH CAVNER, Plaintiffs,
v.
AIRBORNE SYSTEMS NORTH AMERICA OF CA, INC. et al., Defendants.

          ORDER (1) DENYING DEFENDANT'S MOTION FOR RELIEF ARISING FROM VIOLATION OF PROTECTIVE ORDER (2) GRANTING APRIL 11, 2017 STIPULATION REGARDING ADDITIONAL DISCOVERY DISPUTE [ECF NOS. 78, 96]

          Hon. Bernard G. Skomal United States Magistrate Judge.

         On February 6, 2017, the parties contacted the Court regarding a possible violation of the Protective Order. Specifically, Defendant Airborne Systems North America of CA, Inc. alleges that Plaintiffs Steve and Beth Cavner violated the Protective Order by disclosing confidential documents produced by Airborne to Plaintiffs' expert, John Sherman. Airborne asserts that Mr. Sherman is a competitor based on his relationship to Parachute Laboratories, Inc. (“Parachute Labs”). The Court issued a briefing schedule. Airborne filed a Motion for Relief Arising from Violation of Protective Order and Plaintiffs filed an Opposition. (ECF Nos. 78, 80.) As explained more fully below, the Court DENIES the Motion because there is not currently a sufficient connection between Mr. Sherman and Parachute Labs to consider him a competitor on that basis.

         BACKGROUND

         Plaintiffs have retained Mr. Sherman as an expert in this case. Mr. Sherman is employed by Humatec, an expert consulting firm. (Decl. of John B. Sherman (“Sherman Decl.”) ¶ 6.) He founded Parachute Labs in 1969, but retired from the company on November 12, 2002. (Id. ¶ 3.) His declaration and the President of Parachute Labs' declaration both indicate that Mr. Sherman has not worked for or received any compensation from Parachute Labs since his retirement. (Id.; Decl. of Nancy LaRiviere (“LaRiviere Decl.”) ¶ 15.) Additionally, a computerized record from Parachute Labs and the declaration of the company's Office Manager indicate the same. (Decl. of Suzie Bass ¶ 5-6, Ex. A.)

         Mr. Sherman is married to the current President of Parachute Labs, although his declaration indicates that he has not provided his wife with any documents related to this litigation nor discussed any information related to the case with her or any of Parachute Labs' employees. (Sherman Decl. ¶ 5.) She declares the same. (LaRiviere Decl. at ¶ 6.) In addition to having executed the Protective Order in this case, Mr. Sherman also indicates that he is subject to a Humatec Confidentiality Agreement under which he cannot disclose any documents or information to any third party. (Sherman Decl. at ¶ 8.) He declares that he is in compliance with both. (Id.)

         Airborne has submitted the Declaration of Jean C. Berland (“Berland Decl.”) and an exhibit indicating that on January 16, 2017, Parachute Labs' website indicated Mr. Sherman would be teaching a parachute rigging course on January 13-21, 2017. (Berland Decl. ¶ 7, Ex. C.) Additionally, Airborne has submitted sign in sheets from the Parachute Certification Standards Committee's meetings held on February 11, 2012 and August 24, 2012 reflecting Mr. Sherman signed in at each as affiliated with Parachute Labs and included his email address associated with Parachute Labs. (Id. ¶ 9, Ex. E.)

         Mr. Sherman does not dispute that he attended these meetings in 2012, but indicates he did not represent Parachute Labs nor was he compensated by Parachute Labs to attend. (Sherman Decl. ¶ 10.) Ms. LaRiviere indicates the same. (LaRiviere Decl. at ¶ 14.) Mr. Sherman explains he attended with his wife and his signing in as associated with Parachute Labs was a “force of habit, based on my decades of attending these and similar meetings while actively involved in my former company prior to my 2002 retirement.” (Sherman Decl. at ¶ 10.) He indicates he ceased using his email address associated with Parachute Labs for business purposes when he retired, but continued to use it otherwise because it was the email address others had for him and he did not have another personal email address. (Id. ¶ 11.)

         Mr. Sherman's declaration also indicates that he was not present for and did not participate in any way in the January 2017 class listed on the Parachute Labs website. (Sherman Decl. ¶ 9.) Timothy M. Patterson, Jr., present for this class, declares the same. (Decl. of Timothy Patterson, Jr. ¶ 6.) Ms. LaRiviere indicates that she personally maintains the website and the listing of Mr. Sherman was a mistake - she neglected to take his name off the website after he participated as an uncompensated speaker for a similar course years before. (LaRiviere Decl. ¶ 13.)

         DISCUSSION

         I. Protective Order Violation

         Airborne seeks sanctions against Plaintiffs for violating the February 12, 2016 Protective Order's provision prohibiting disclosure of confidential documents to competitors of the designating party. (Prot. Order ¶ 10.) There is no dispute that Airborne's confidential documents have been disclosed to Mr. Sherman. The only issue is whether Mr. Sherman is a competitor to Airborne.

         Airborne argues Mr. Sherman is a competitor and seeks an order: (1) compelling Mr. Sherman to return all confidential documents; (2) disqualifying Mr. Sherman as an expert for Plaintiffs; (3) imposing civil contempt sanctions against Plaintiffs and their counsel; (4) requiring Plaintiffs to identify or certify that their second, anonymous consulting expert is not associated with any parachute design or manufacturing company that sells parachutes to U.S. or foreign militaries.[1]

         The provision of the Protective Order Airborne asserts Plaintiffs violated provides as follows:

Discovery Materials designated as Confidential may not be provided to competitors of the designating party, including but not limited to in-house counsel for the designating party's competitors, their paralegals, or regularly employed office staff, but excluding local counsel for any defendant in this case. Any party that believes it is necessary to disclose Discovery Materials designated as Confidential to any competitor(s) of the ...

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