United States District Court, E.D. California
MORRISON C. ENGLAND, JR UNITED STATES DISTRICT JUDGE
CSPC Dophen Corporation (“Plaintiff” or
“CSPC Dophen”), a pharmaceutical research and
development company, brings this action against Defendant Dr.
Sean Hu (“Dr. Hu”)-a former employee-alleging
various causes of action, most of which stem from allegations
that he misappropriated confidential or proprietary
information while working for CSPC Dophen. According to the
First Amended Complaint, while employed by CSPC Dophen, Dr.
Hu incorporated "Dophen Biomed" without the
knowledge or approval of Plaintiff, and proceeded to engage
in numerous unauthorized activities including applying for
grants under the name Dophen Biomed, representing that
employees of CSPC Dophen were employees of Dophen Biomed, and
creating a sham lease from CSPC Dophen to Dophen Biomed. Dr.
Hu then allegedly used Plaintiff's proprietary
information to submit an application to the FDA for approval
of a new drug under the name of Dophen Biomed. Plaintiff
claims this is their rightful property. Dr. Hu has filed a
third-party complaint and counterclaim.
January 12, 2018, the Court ordered this matter stayed
pending the parties' referral to the Voluntary Dispute
Resolution Program. ECF No. 46. At that time, the Court
denied two pending motions (ECF Nos. 41 and 45) as moot
without prejudice to refiling those motions after completion
of VDRP. The already submitted Motion for Disqualification of
Counsel (ECF No. 16) remained under submission.
before the Court is Defendant's Motion to Withdraw as
Counsel. ECF No. 51. Counsel's filing indicates that Dr.
Hu has indicated his desire to release Krogh & Decker as
counsel and to represent himself in this matter. He has
instructed counsel to take no further action on this matter
aside from filing the present Motion. Dr. Hu's
declaration filed along with the present motion confirms
counsel's representations in this regard. ECF No. 51-2.
has filed a non-opposition to the motion. That
non-opposition, however, is conditioned on Krogh & Decker
not providing the entire case file to Dr. Hu upon their
release, as required under California Rule of Professional
Conduct 3-700(D). Instead, Plaintiff proposes two
alternatives for at least some of the evidence: (1) Krogh
& Decker retain certain relevant evidence pending a
ruling on Plaintiff's motion to compel; or (2) the
evidence be handed over to a neutral third party pending a
ruling on the same. Plaintiff makes this request on grounds
it has evidence Dr. Hu has already destroyed or at least
attempted to destroy relevant evidence in this case.
Specifically, according to Plaintiff, when it received Dr.
Hu's laptop and cell phone pursuant to a previous
discovery request, the phone had been restored to factory
settings and the laptop cleared of certain information using
an anti-forensic evidence elimination tool found in the
system. Plaintiff believes that the information cleared from
the laptop may be on one or more backup discs (or other
portable storage devices) which are currently in Krogh &
Decker's possession and are the subject of a pending
Motion to Compel before Magistrate Judge Barnes. Plaintiff
fears that if returned to Dr. Hu pending a ruling on the
motion to compel, the evidence could be permanently lost or
counsel responds that Plaintiff's request amounts to a
violation of California Rule of Professional Conduct
3-700(D), which requires counsel upon termination to release
to the client all client papers and property. Moreover,
Defendant argues that Federal Rule of Civil Procedure 37 and
the Court's inherent powers can adequately safeguard the
integrity of this litigation.
regard to the Motion itself, good cause appearing and because
no apparent prejudice or delay will result, the Court GRANTS
Defendant's Motion to Withdraw as Counsel (ECF No. 51)
and further GRANTS Dr. Hu's pending Request for
Permission for Electronic Case Filing (ECF No. 59) since he
will be proceeding pro se in this matter.
light of Plaintiff's representations and the relatively
strong indication that spoliation has already occurred or at
least been attempted in this case, however, the Court agrees
that providing certain materials to Dr. Hu at this stage of
the litigation may be risky. Although the Court could
admittedly impose sanctions-including terminating
sanctions-if it were determined that Dr. Hu destroyed
relevant evidence, this is a road the Court would rather not
be required to take. Therefore, understanding Plaintiff's
spoliation concerns as well as counsel's reservations
with violating Rule 3-700, the Court orders Defendant's
counsel to lodge a complete copy of the purported backup
disc, as well as copies of any other portable storage device
in its possession, with the Court not later than ten (10)
days following electronic filing of this Order. Once counsel
has lodged complete copies, the original evidence may be
turned over to Dr. Hu along with any other papers or
property. Further, Plaintiff is ordered to file a status
report not later than ten (10) days after obtaining a ruling
on its pending Motion to Compel, advising the Court of the
outcome of that motion and seeking access to the lodged
evidence, if appropriate under the terms of the magistrate
also pending are Defendant's submitted Motion for
Disqualification of Counsel (ECF No. 16), and Plaintiff's
Motion to Dismiss and/or Strike Defendant's First Amended
Counterclaims (ECF No. 53). As the Motion to Withdraw has
been granted and Dr. Hu has indicated his intent to proceed
pro se, this matter is hereby REFERRED to the assigned
Magistrate Judge, and Defendant's Motion for
Disqualification of Counsel (ECF No. 16) and Plaintiff's
Motion to Dismiss/Strike (ECF No. 53) are DENIED as moot
without prejudice to refiling before the assigned Magistrate
summarize, the Court orders as follows:
(1) Defendant's Motion to Withdraw as Counsel, ECF No.
51, is GRANTED.
(2) Dr. Hu's Request for Permission for Electronic Case
Filing, ECF No. 59, is GRANTED.
(3) Defendant's counsel is ordered to lodge with the
Court a complete copy of any backup disc or other portable
storage device containing information or evidence relevant to
this action not later than ten (10) days after electronic
filing of this Order.
(4) Plaintiff is ordered to file a status report with the
Court not later than ten (10) days following issuance of a
ruling on its pending Motion to Dismiss before Magistrate
Judge Barnes. The status report shall update the Court as to
Judge Barnes's ...