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Storz Management Co. v. Carey

United States District Court, E.D. California

June 25, 2019

STORZ MANAGEMENT COMPANY, a California Corporation, and STORZ REALTY, INC., Plaintiffs,
v.
ANDREW CAREY, an individual, and MARK WEINER, an individual, Defendants.

          ORDER

          Deborah Barnes, Judge

         Pursuant to Local Rule 302(c)(1), this matter came before the undersigned on June 21, 2019, for hearing of non-parties' motions to quash (ECF Nos. 74-77), and plaintiffs' motion for sanctions. (ECF No. 78.) Attorneys Andrew Bluth and Christopher Bakes appeared on behalf of the plaintiffs. Attorneys Charles Post and Alex Kachmar appeared on behalf of the defendants.

         Upon consideration of the arguments on file and those made at the hearing, and for the reasons set forth on the record at that hearing and below, the motions will be denied.

         BACKGROUND

         Plaintiffs commenced this action on January 11, 2018, by filing a complaint and paying the required filing fee. (ECF Nos. 1 & 2.) On January 30, 2018, plaintiffs filed an amended complaint. (ECF No. 7.) In relevant part, the amended complaint alleges that plaintiff Storz Management Company, (“Storz Management”), provides RV Park and Mobile Home Park management services. (Am. Compl. (ECF No. 7) at 5.[1]) Defendants Andrew Carey and Mark Weiner were, respectively, Storz Management's Chief Executive Officer and Chief Financial Officer/Chief Operating Officer. (Id. at 2.) Defendants allegedly began misappropriating plaintiffs' trade secrets and soliciting plaintiffs' clients in 2016 to establish a competing business. (Id. at 5-9.) As a result, defendants' employment was terminated on December 1, 2017. (Id. at 10.)

         Pursuant to these allegations, the amended complaint alleges causes of action for violation of the Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq., breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, fraud, unfair competition, and violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. (Id. at 13-20.)

         On May 23, 2019, non-parties MHP Holding, LLC, Dudugian & Maxey, a Law Corporation, Diamond D. Construction, Inc., and Hunter and Renfro, LLP, filed the pending motions to quash defendants' subpoenas. (ECF Nos. 74-77.) A Joint Statement re: Discovery Disagreement was filed on June 14, 2019, with respect to these motions. (ECF No. 83.)

         On June 3, 2019, plaintiffs filed the pending motion for sanctions along with a memorandum and declarations in support. (ECF Nos. 78-82.) Defendants filed a declaration and opposition to the motion for sanctions on June 14, 2019. (ECF Nos. 84-85.) Plaintiffs filed a reply on June 19, 2019, and a notice of errata on June 20, 2019. (ECF Nos. 86 & 87.)

         ANALYSIS

         I. Nonparties' Motions to Quash

         A. Standards

         “Federal Rule of Civil Procedure 45 governs discovery of non-parties by subpoena.” In re Subpoena of DJO, LLC, 295 F.R.D. 494, 497 (S.D. Cal. 2014). Rule 45 provides that “[o]n timely motion, the court for the district where compliance is required must quash or modify a subpoena that . . . subjects a person to undue burden.” Fed.R.Civ.P. 45(d)(3)(A)(iv). In re Subpoena of DJO, LLC, 295 F.R.D. 494, 497 (S.D. Cal. 2014) (quoting Fed.R.Civ.P. 45).

         An evaluation of undue burden requires the court to weigh the burden to the subpoenaed party against the value of the information to the serving party. Whether a subpoena imposes an “undue burden” depends upon “such factors as relevance, the need of the party for the documents, the breadth of the document request, the time period covered by it, the particularity with which the documents are described and the burden imposed.” Travelers Indem. Co. v. Metropolitan Life Ins. Co., 228 F.R.D. 111, 113 (D. Conn. 2005) (quoting U.S. v. International Business Machines Corp., 83 F.R.D. 97, 104 (D.C. N.Y. 1979)). “[C]oncern for the unwanted burden thrust upon non-parties is a factor entitled to special weight in evaluating the balance of competing needs.” Cusumano v. Microsoft Corp., 162 F.3d 708, 717 (1st Cir. 1998). Additionally, “[a] court may . . . impose sanctions when a party issues a subpoena in bad faith, for an improper purpose, or in a manner inconsistent with existing law.” Legal Voice v. Stormans Inc., 738 F.3d 1178, 1185 (9th Cir. 2013).

         “[T]he burden of persuasion in a motion to quash a subpoena issued in the course of civil litigation is borne by the movant.” Concord Boat Corp. v. Brunswick Corp., 169 F.R.D. 44, 48 (S.D. N.Y. 1996); see also Moon v. SCP Pool Corp., 232 F.R.D. 633, 637 (C.D. Cal. 2005) (“the party who moves to quash a subpoena has the ‘burden of persuasion'”).

         B. Non-parties' Arguments

         The joint statement asserts the following three arguments in support of the motions to quash the subpoenas.[2] Those arguments fail to satisfy the applicable burden as articulated below. The motions to quash will, therefore be denied.

         1. Improper Purpose/Should Have Been ...


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