Minute OrderCal. Super. - 6th Dist.December 19, 2019SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER McCall v. Align Technology, Inc. Hearing Start Time: 1:30 PM 19CV360501 Hearing Type: Hearing: Demurrer Date 0f Hearing: 12/17/2020 Comments: Overruled in its entirety. Heard By: Kulkarni, Sunil R Location: Department 1 Courtroom Reporter: - No Court Reporter Courtroom Clerk: Mark Rosales Court Interpreter: Court Investigator: Parties Present: Future Hearings: Exhibits: - Alesia Collins for Plaintiff, by Courtcall Video. The tentative ruling is not contested. The tentative ruling is adopted as follows: This is an action to enforce shareholder inspection rights. Before the Court is Defendant s demurrer to the Amended Complaint on the grounds that this Court lacks jurisdiction over an inspection demand pursuant to title 8, section 220 0f the Delaware General Corporation Law Code ( Section 220 ) and Plaintiff has failed t0 plead facts stating a credible basis to suspect wrongdoing by Defendant as required to support her demand. (Code Civ. Proc., 430.10, subds. (a) and (e).) Plaintiff opposes the demurrer. As explained below, the Court OVERRULES Defendant s demurrer. |. BACKGROU ND Plaintiff 'Is a beneficial stockholder 0f defendant Align Technology, Inc. ( Align 0r the Compa ny ), a Delaware corporation with principal executive offices in San Jose (Amended Complaint, 1, 8, 9.) On February 22, 2019, she sent a demand to the Compa ny to exercise her statutory right to inspect its books and records pursuant t0 Section 220, which was rejected 0n April 16, 2019. (|d., 71.) She sent a second demand on May 1, 2020. (|bid.) Her stated purpose was to investigate whether Align engaged in anticompetitive conduct to protect its monopolies in the clear aligner and intraoral scanner markets, as well as to investigate misleading and improper statements by its fiduciaries about the Compa ny s competitive position in the market and financial condition. (|d., 2.) These issues are related to securities and consumer class action lawsuits pending against the Compa ny, as well as a private antitrust lawsuit by a competitor, 3Shape Trios A/S( BShape ). (|d., 5, 26, 27, 69.) The operative May 2020 demand stated that after reviewing the requested books and records, Plaintiff would take appropriate action, including potentially: (i) suggesting corporate governance reforms to the board; (ii) presenting a litigation demand to the board,- or (iii) filing a derivative action in lieu of making a demand, ifshe deemed such a demand futile. (ld., 72.) In a letter dated June 1, 2020, the Company refused Plaintiff s May 2020 demand, claiming that Plaintiff had not established a credible basis to suspect wrongdoing and that Plaintiff s document demands were Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page l 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER overbroad. (Amended Complaint, 6.) The Compa ny continues to refuse to allow Plaintiff to inspect the documents demanded. (|d., 7.) Plaintiff filed this action t0 compel inspection pu rsuant t0 Section 220 0n December 19, 2019, based 0n her February 2019 inspection demand. She amended her complaint on June 17, 2020 to address her May 2020 demand, continuing to assert a single cause of action under Section 220. The insta nt demurrer followed. ||. LEGAL STANDARD The fu nction of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, [a] demurrer reaches only t0 the contents of the pleading and such matters as may be considered under the doctrine ofjudicial notice. (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations and quotations omitted,- see also Code Civ. Proc., 430.30, subd. (3).) It 'Is not the ordinary fu nction 0f a demurrer t0 test the truth 0f the plaintiff s allegations or the accuracy with which he describes the defendant s conduct. Thus, the facts alleged in the pleading are deemed to be true, however improbable they may be. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) In ruling on a demurrer, the allegations 0f the complaint must be liberally construed, with a view to substantial justice between the parties. (Glennen v. Allerga n, Inc. (2016) 247 Cal.App.4th 1, 6.) Nevertheless, while [a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions 0f law 0r fact. (George v. Automobile Club 0f Southern California (2011) 201 Cal.App.4th 1112, 1120.) A demurrer will lie where the allegations and matters subject to judicial notice clearly disclose a defense or barto recovery. (Casterson v. Superior Court (2002) 101 Cal.App.4th 177, 183.) |||. SUBJECT MATTER JURISDICTION Section 220 provides that if a corporation refuses to permit an inspection, the stockholder may apply to the Court 0f Chancery for an order t0 compel such inspection. The Court 0f Chancery is hereby vested with exclusivejurisdiction to determine whether or not the person seeking inspection is entitled to the inspection sought. (Del. Code Ann. tit. 8, 220(c) (2016).) In its moving papers, Align argues that as a number of courts outside Delaware have held this language requires all actions t0 enforce inspection rights under Section 220 to be filed in Delaware. McCall contends that as other courts outside Delaware have held, and as the Delaware Court of Chancery has discussed this language refers to the Court of Chancery s jurisdiction relative to other Delaware courts. After Align s demurrer was filed, the Delaware Court of Chancery addressed this issue in the Specific context of shareholder inspection demands in Juul Labs, Inc. v. Grove (Del. Ch. 2020) 238 A.3d 904 (Juul). It explained that absent the exclusive forum-selection clause present in that case, nothing would prevent a California state court from hearing [a] claim to inspect books and records under Delaware law. A hoary Delaware decision once entertained a petition t0 inspect the books and records 0f a Connecticut corporation. See Richardson v. Swift, 12 Del. 137, 30 A. 781 (Del. Su per. 1885). And this court has Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 2 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER held that statutes conferring exclusive jurisdiction on the Delaware Court of Chancery as a matter of the internal allocation 0f authority within the Delaware court system d0 not (and cannot) exclude non-Delaware courts from hearing cases implicating those statutes. See In re Daniel Kloiber Dynasty Trust, 98 A.3d 924, 938 40 (Del. Ch. 2014),- see also Stern v. South Chester Tube, 390 U.S. 606, 609 10, 88 S.Ct. 1332, 20 L.Ed.2d 177 (1968) (holding that federal court could exercise diversity jurisdiction over stockholder s claim t0 inspect books and records); cf. Restatement (Second) of Conflict of Laws 313 ( [A] court will usually entertain an action by a shareholder to compel the officers of a foreign corporation to allow him to inspect such of its books 0r properties as are within the state. ). (Juul, supra, 238 A.3d at p. 919, fn. 13.) In its reply brief, Align appears t0 concede that Juul resolves this issue in Plaintiff s favor. (See Reply, p. 7, fn. 3.) The Court will follow Juul on this point, and OVERRULES Defendant s demurrer based on lack of subject matterjurisdiction. IV. FAILURE TO STATE A CLAIM Stockholder inspection rights are a core matter of internal corporate affairs. (Juul, supra, 238 A.3d at p. 915.) Accordingly, because Align 'Is a Delaware corporation, Plaintiff s stockholder inspection rights are governed by Delaware law. (See id. at pp. 913 918.) Under Section 220, a stockholder is entitled to inspect a company s books and records upon demonstration that he or she (1) is a stockholder ofthe compa ny, (2) has made a written demand on the company, and (3) has a proper purpose for making the demand. (Kosinski v. GGP Inc. (Del. Ch. 2019) 214 A.3d 944, 950.) A purpose is proper where it reasonably relates to the stockholder s interest as such. (Id. at p. 952.) It is well established that a stockholder s desire to investigate wrongdoing or mismanagement is a proper purpose. (Seinfeld v. Verizon Communications, Inc. (Del. 2006) 909 A.2d 117, 121 (Seinfeld); see also KT4 Partners LLC v. Pala ntir Technologies Inc. (Del. 2019) 203 A.3d 738, 758 (KT4) [the investigation of possible wrongdoing by management is [o]ne ofthe most traditional proper purposes for a 220 demand ].) Here, Align does not challenge Plaintiff s status as a stockholder or the formal compliance of her inspection demands with statutory requirements. Nor does 'It contend that her stated purposes 'In making the demand are improper. Rather, it urges that Plaintiffs allegations fail to establish the necessary credible basis to infer possible mismanagement required for a claim under Section 220 to succeed at trial, and her specific demands are overbroad. A. The Credible Basis Standard at Trial and on Demurrer Ultimately, [a] Section 220 plaintiff with a proper purpose must further prove that 'It has some credible evidence of wrongdoing sufficient to warrant continued investigation, and the scope of relief under the statute will typically be limited only to the inspection of those books and records that are necessary and essential t0 the satisfaction 0f the stated purpose, a burden 0f proof with which the plaintiff 'Is charged. (Highland Select Equity Fu nd, L.P. v. Motient Corp. (Del. Ch. 2006) 906 A.2d 156, 164, italics original, affd sub Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 3 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER nom. Highland Equity Fund, L.P. v. Motient Corp. (Del. 2007) 922 A.2d 415, and aff d sub nom. Highland Equity Fund, L.P. v. Motient Corp. (Del. 2007) 922 A.2d 415.) T0 obtain relief under Section 220, a stockholder is emphatically not required t0 prove that wrongdoing 0r mismanagement have actually occurred: Stockholders need only show, by a preponderance of the evidence, a credible basis from which the [court] can infer there is possible mismanagement that would warra nt further investigation a showing that may ultimately fall well short 0f demonstrating that anything wrong occurred. That threshold may be satisfied by a credible showing, through documents, logic, testimony or otherwise, that there are legitimate issues of wrongdoing. (Seinfeld, supra, 909 A.2d at p. 123, internal citations and quotations omitted.) The credible basis standard sets the lowest possible burden of proof : the only way to reduce it further would be t0 eliminate any requirement that a stockholder show some evidence 0f possible wrongdoing. (Seinfeld, supra, 909 A.2d at p. 123, italics original.) The standard of proof is low because a major purpose of Section 220 proceedings is to help the stockholder to ferret out whether [alleged] wrongdoing is real and then possibly file a lawsuit if appropriate. (KT4, supra, 203 A.3d at p. 758.) Indeed, a recognized rise in books and records litigation is directly attributable to [the Supreme Court of Delaware s] encouragement of stockholders, who can show a proper purpose, to use the tools at hand to obtain the necessary information before filing a derivative action. (Seinfeld, supra, 909 A.2d at p. 120; see also King v. VeriFone Holdings, Inc. (Del. 2011) 12 A.3d 1140, 1145 (King) [ Delaware courts have strongly encouraged stockholder-plaintiffs to utilize Section 220 before filing a derivative action, in order to satisfy the heightened demand futility pleading requirements 0f Court 0f Chancery Rule 23.1. ].) Insum, [t]he Delaware Supreme Court has not required a stockholder seeking books and records t0 introduce evidence from which a court could infer the existence of an actionable claim. The Seinfeld test only requires that a stockholder establish, by a prepondera nce of the evidence, that there is a credible basis to infer possible corporate wrongdoing 0r mismanagement. The Delaware Supreme Court has explained that this standard strikes an appropriate balance between providing stockholders who can offer some evidence of possible wrongdoing with access to corporate records and safeguarding the right of the corporation to deny requests for inspections that are based only upon suspicion 0r curiosity. Seinfeld, 909 A.2d at 118. The Delaware Supreme Court has repeatedly urged stockholders to use Section 220 to investigate possible wrongdoing before filing derivative actions, recognizing that without doing so, plaintiffs typically lack the facts necessary to plead an actionable claim against the board that can survive a Rule 23.1 motion. The logical implication 0f this message 'Is that t0 obtain books and records, a stockholder does not have t0 introduce evidence from which a court could infer the existence of an actionable claim. (Leba non County Employees Retirement Fund v. Amerisourcebergen Corporation (Del. Ch., Jan. 13, 2020) Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 4 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER 2020 Employee Benefits Cas. 9721, 2020 WL 132752, *15 (Lebanon), footnotes omitted.) Considering this context, the use of a demurrer to challenge the adequacy of a plaintiff s alleged evidence of wrongdoing in support 0f a Section 220 claim 'Is dubious. As the Delaware Court 0f Chancery recently explained, [t]he regrettable reaction by defendant corporations [to Delaware courts encouragement of Section 220 actions] has been massive resistance. As one academic article commented, defendants have turned books and records litigation into a surrogate proceeding to litigate the possible merits 0f the suit where they place obstacles in the plaintiffs way to obstruct them from employing it as a quick and easy pre-filing discovery tool. (Pettry v. Gilead Sciences, Inc. (Del. Ch., Nov. 24, 2020, N0. CV 2020-0132-KSJM) 2020 WL 6870461, at *29, citation omitted; see also Khanna v. Covad Communications Grou p, Inc. (Del. Ch., Jan. 23, 2004, No. 20481- NC) 2004 WL 187274, at *6 [a Section 220 action is not the proper forum for a detailed analysis equivalent to a merits-based dismissal motion in [a] substantive action; [t]o engage in the detailed analysis-an analysis possibly less plaintiff friendly than one that would be carried under [a motion t0 dismiss] because, 'In part, the facts might be those provided by the corporate insiders-would defeat the purposes of this summary proceeding and the underlying policy guidance that potential plaintiffs use the procedures of Section 220 to determine if a case exists for the shareholder to pursue ].) And as the Court 0f Chancery observed years ago, [B]ooks and records actions are summary proceedings that are t0 be promptly tried. The summary nature of the proceeding dictate[s] against allowing preliminary motions addressed to the pleadings to be presented and decided... Such a practice would tend to promote delay, thereby undercutting the statutory mandate and policy that the proceeding be summary in character. A pretrial motion therefore ought not t0 be presented for decision in advance of the final hearing on the merits except where necessary to avoid substantial prejudice. (Louisiana Mun. Police Employees Retirement System v. Morgan Stanley & Co. Inc. (Del. Ch., Mar. 4, 2011, N0. CIV.A. 5682-VCL) 2011 WL 773316, at *3, citations omitted; see also Romero v. Career Educ. Corp. (Del. Ch., July 19, 2005, No. 793-N) 2005 WL 5750613, at *2 (Romero) [the Court ofChancery has held that the basis for a 220 plaintiffs suspicions can best be addressed after the factual record is developed at trial ], quoting Deephaven Risk Arb Trading Ltd. v. UnitedGlobalCom, Inc. (Del. Ch., Aug. 30, 2004, N0. CIV.A. 379-N) 2004 WL 1945546, at *8 (Deephaven).) As the Supreme Court of Delaware observed in a related context, it is wasteful of the court s and the litigants resources to have a regime that could require repeatedly [litigating] the issue 0f demand futility. (King, supra, 12 A.3d at p. 1150.) In any event, the credible basis standard does not refer t0 a plaintiff s pleading burden under 220, but rather, its burden of proof at trial. (Romero, supra, 2005 WL 5750613, at *2, internal citation and quotations omitted.) With regard to the pleading burden itself, the Court of Chancery has stated that a plaintiff must do more than merely state, 'In a conclusory manner, a generally accepted proper purpose. [A plaintiff] must state a reason for the purpose, 'I.e., what it will do with the information, or an end to which that investigation may lead. (Beiserv. PMC-Sierra, Inc. (Del. Ch., Feb. 26, 2009, No. CIV. A. 3893-VCL) 2009 WL 483321, at *3, quoting West Coast Management & Capital, LLC v. Carrier Access Corp. (Del. Ch., Nov. 14, 2006, No. 2262-N) 2006 WL 4782497, at *6.) This is not a difficult requirement to satisfy. Finally, while it is true that the Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 5 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER plaintiff may not merely state that he suspects corporate mismanagement and must allege some factual basis for that suspicion (Welland v. Central & South West Corp. (Del. Ch., May 9, 1989) 15 Del. J. Corp. L. 273, 276, 1989 WL 48740, *1), he or she need not identify specific actions of specific officials that were wrongful (Deephaven, supra, 2004 WL 1945546, at *8) or make a showing that would survive a motion to dismiss a substantive lawsuit. It is a rare instance[] in the realm of Section 220 litigation where the plaintiffs trial proof on this point will come up short (Hoellerv. Tempur Sealy International, Inc. (Del. Ch., Feb. 12, 2019, No. CV 2018-0336-JRS) 2019 WL 551318, at *1); it is an even rarer case where it would be appropriate to terminate a Section 220 action 0n demurrer on this ground. B. Plaintiffs Allegations As alleged 'In the Amended Complaint, Align designs, manufacturers, and markets products for treating malocclusion, or the misalignment of teeth. (Amended Complaint, 11.) Its business is divided into two segments: (1) clear aligner products, marketed under the brand name Invisalign; and (2) intraoral scanning devices and related software and services, including the 'ITero scanner. (|d., 11 13.) Historically, Align has dominated these markets by aggressively deploying its patent portfolio. (|d., 14 18.) But Plaintiff alleges that as its patents began to expire, the Compa ny secured a series of unlawful anticompetitive agreements with orthodontists and dentists t0 use the 'ITero scanner, a de facto closed system designed t0 work best with Invisalign products, thereby excluding its clear aligner rivals. (|d., 19 25.) This conduct led to a private antitrust lawsuit by Align s major competitor in the scanner market, 3Shape, as well as a consu mer class action lawsuit 0n behalf 0f purchasers 0f Invisalign aligners 0r iTero intraoral scanners. (|d., 26 27.) Mea nwhile, as an influx 0f new competitors entered the high-end, comprehensive clear aligner market, Align s fiduciaries assured analysts and investors that this new competition would be confined to the Iow-end, non- comprehensive product segment that made up only a small portion of Align s revenues, and that it would not trigger price adjustments in Align s comprehensive products. (Amended Complaint, 28 29.) All the while, Align s fiduciaries were planning and implementing an aggressive new discounting program to Align s comprehensive product line that immediately drove down the Compa ny s average selling prices ( ASP s), even as they continued t0 promise higher ASPS. (Id. at 28 40.) Analysts and investors were shocked when Align revealed on October 24, 2018 that, as a result of steep discounts to its comprehensive products, ASPs for its clear aligners had declined approximately $85 quarter-over-quarter one ofthe largest declines in its history as a public company. (Id. at 41 46.) Align s fiduciaries also revealed that they did not expect the Compa ny s ASPs to recover, but instead expected ASP to remain flat at the sa me level throughout 2019, representing the new normal for the Company in the face of increased competition. (|d., 47.) This news caused Align s stock price t0 fall by more than twenty percent. (|d., 49.) Making matters worse, between July 1, 2018 and August 31, 2018, while the Compa ny s stock price was inflated due to the improper statements detailed above, Align s fiduciaries caused or allowed the Compa ny to repurchase approximately 425,891 shares of its stock at significa ntly inflated prices. (Id. at 52 55.) Meanwhile, certain fiduciaries sold over $64 million worth of stock between when the misleading statements began on May 23, 2018 and the truth emerged on October 24, 2018. (Id. at 56 68.) Based on these events, the Compa ny is now the subject of a securities class action 0n behalf 0f investors who purchased Align shares at inflated prices. (|d., 69.) C. Discussion Align contends that Plaintiff relies entirely 0n the pendency 0f other lawsuits one 0f which has been dismissed as a basis to obtain books and records. While a few Delaware opinions have stated that a plaintiff Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 6 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER fails to show a credible basis to infer wrongdoing by relying solely on the fact that others have sued the compa nv, those statements are largely either dicta 0r informed by a very different factual context. Here, Plaintiff alleges facts to support her suspicions of wrongdoing as summarized above: the mere fact that these same circumsta nces are also alleged in pending substantive lawsuits does not mean they cannot provide a credible basis for suspicion here, as Defendant s own authority confirms. (See In re UnitedHealth Group, Inc. Section 220 Litigation (Del. Ch., Feb. 28, 2018, N0. CV 2017-0681-TMR) 2018 WL 1110849, at *7 (UnitedHealth), affd sub nom. UnitedHealth Group Incorporated v. Amalgamated Bank asTrustee for Longview Largecap 500 Index Fund (Del. 2018) 196 A.3d 885 [allegations 0f underlying substa ntive lawsuits provided a credible basis to infer wrongdoing“ Notably, most of Align s demurrer consists of argument that the related lawsuits fail to state a claim. This is a questionable approach considering that the two lawsuits Align focuses on the securities class action and the 3Shape antitrust suit ultimately survived motions t0 dismiss. In any event, 'It 'Is not appropriate for the Court to engage in a detailed analysis of the merits of pending or potential substantive lawsuits against Align for several reasons. First, as discussed above, a Section 220 action is generally not an appropriate forum to litigate the merits of potential substantive litigation by a shareholder, and this is particularly true at the pleading stage. (See UnitedHealth, supra, 2018 WL 1110849, at *7 [rejecting defendant s attempt to require [the court to] analyze the strengths and weaknesses of the underlying Qu'l Tam Action and potential derivative claims, emphasizing that [t]his Court has repeatedly stated that a Section 220 proceeding does not warrant a trial on the merits of underlying claims ].) Moreover, Plaintiffs stated purpose for investigating the alleged wrongdoing at issue here is not only to determine whether a derivative action may be appropriate, but t0 ta ke appropriate action more generally, including potentially suggesting corporate governance reforms to the board. This is a proper purpose that renders considerations like whether Plaintiff can establish a non-exculpated claim or plead facts that would survive demurrer in a potential substantive action tangential t0 the focus 0f this Section 220 action, which 'Is more generally whether Plaintiff can demonstrate a credible basis to infer wrongdoing by Align that should be addressed through appropriate action. (See Rodgers v. Cypress Semiconductor Corporation (Del. Ch., Apr. 17, 2017, No. CV 2017-0070-AGB) 2017 WL 1380621, at *5 [because shareholder demonstrated credible bases t0 infer wrongdoing by one director and a genuine desire to pursue corrective actions outside of derivative litigation, it is irreleva nt whether Rodgers has established a credible basis to infer a non-exculpated breach of fiduciary duty by any of the other members 0f Cypress board ], abrogated 0n another ground by Tiger v. Boast Apparel, Inc. (Del. 2019) 214 A.3d 933.) In any event, while Align argues at length that disclosures in its public filings disprove Plaintiff s allegations that its fiduciaries concealed the likelihood that Align would be forced to discou nt its comprehensive product line, 'It does not meaningfully grapple with Plaintiff s allegations that it entered into a series 0f unlawful anticompetitive agreements with orthodontists and dentists, or with the related issues raised by 3Shape s complaint and the consu mer class action (which has apparently been re-filed in the Northern District of California after the plaintiff voluntarily dismissed its initial lawsuit in the District 0f Delaware). Plaintiffs allegations that Align embarked on a campaign of anticompetitive conduct to preserve its market share as its patents expired may raise a credible basis to suspect someone at Align directed this conduct or that the board failed to exercise its oversight duties in this regard. This theory is likely to raise factual issues that preclude its resolution on demurrer, and is not adequately addressed by the briefing before the Court in any event. Because a demurrer does not lie as to a portion of a cause of action (see Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167), Align s failure to adequately address this theory is fatal to its entire demurrer. Align s arguments regarding the scope of Plaintiffs specific inspection demands fail for the same reason. If Primed: 1261762020 lls‘17s‘2020 Hearing: Delmm‘er - 19CV360501 Page 7 01‘9 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER any of Plaintiff s demands, even in part, is supported by a credible basis to suspect wrongdoing, it would be inappropriate t0 terminate this action on demurrer. The Court cannot rule out this possibility on the record before it, and Align fails to cite any case where a court has rejected a Section 220 action at the pleading stage due to the overbreadth of the inspection demands at issue. The Court accordingly OVERRULES Align s demurrer for failure to state a claim. V. CONCLUSION AND ORDER For the reasons discussed above, Align s demurrer is OVERRULED in its entirety. The Court will prepare the order. ** COVID-19 LAW AND MOTION HEARING PROCEDURES Pursuant to the Judicial Council s Emergency Rule 3(a)(1) and (3), all law and motion hearings will be conducted remotely through CourtCall until further notice. Please see the General Order re: COVID-19 Emergency Order Regarding Complex Civil Actions, and in particular sections 7 and 10, available at http://www.scsc0urt.org/ genera |_'|nfo/news_media/newspdfs/GENERALORDER_RECOVID-19_ EMERGENCY_ORDER_REGARDING_COMPLEXCIVILACTION.pdf. If a party gives notice that a tentative ruling will be contested, any party seeking t0 participate in the hearing should contact CourtCall. Public access to remote hearings is available on a listen-only line by calling 888-808-6929 (access code 2752612) State and local rules prohibit recording of court proceedings without a court order. These rules apply while in court and also while participating in a remote hearing or listening in on a public access line. No court order has been issued which would allow recording 0f any portion 0fthis motion calendar. The court does not provide court reporters for proceedings in the complex civil litigation departments. Any party wishing to retain a court reporter to report a hearing may do so in compliance with this Court s October 19, 2020 Policy Regarding Privately Retained Court Reporters. The court reporter will participate remotely and will not be present in the courtroom. The Court will prepare an order. 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