Reply_iso_defendants_motion_for_protective_orderReplyCal. Super. - 2nd Dist.November 9, 2016e Dr iv e, Su it e 30 0 Al am ed a, CA 94 50 1 Te le ph on e: (5 10 ) 8 6 4 - 3 6 0 0 Fa cs im il e: (5 10 ) 86 4- 36 01 C H A P M A N & IN TR IE RI , LL .P At to rn ey s at La w 6 Ma ri ne r S 22 3 10 11 12 13 14 15 16 17 18 19 20 21 7% 23 24 25 26 27 28 Kurt T. Hendershott (SBN 131036) Karen M. St. Onge (SBN 250014) John F. Baumgardner (SBN 275674) CHAPMAN & INTRIERI, L.L.P. 2236 Mariner Square Drive, Suite 300 Alameda, California 94501-1089 Telephone: (510) 864-3600 Facsimile: (510) 864-3601 Attorneys for Defendant FEDEX GROUND PACKAGE SYSTEM, INC., CARLOS AZUCENA, and LOAD N’ GO, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES JOHN STEWART, individually and as Case No. BC640257 successor in interest to James Stewart; KIMBERLY STEWART and MIKELA REPLY IN SUPPORT OF CASTRO, DEFENDANTS’ MOTION FOR Plaintiffs, PROTECTIVE ORDER VS. Date: October 6, 2017 FEDEX GROUND PACKAGE SYSTEM, Time: 8:30 a.m. INC., a Pennsylvania Corporation; CARLOS Dept. 30 AZUCENA, an individual; and LOAD N’ GO, INC., a California Corporation, RESERVATION #170908249463 and DOES 1 — 20, Defendants. / Action Filed: November 9. 2016 I. Introduction Despite their formal opposition, Plaintiffs’ are opposing a motion about a document which they concede Defendants have provided them for use in this litigation which they concede is the very document establishing FedEx Ground Package System, Inc.’s (“FedEx Ground”) business model. The operating agreement is an integral and confidential component of its unique business model. It is also made abundantly clear that the sole reason for challenging the confidential designation is based upon Plaintiffs’ counsels’ desire to share the confidential document amongst the Plaintiffs’ bar. 1 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER C H A P M A N & IN TR IE RL L. L. P At to rn ey s at L a w 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 A l a m e d a , C A 94 50 1 Te le ph on e: (5 10 ) 8 6 4 - 3 6 0 0 Fa cs im il e: (5 10 ) 86 4- 36 01 10 11 12 13 14 15 16 17 18 19 20 a1 22 23 24 25 26 27 28 In attempting to buttress their bare bones and conclusory arguments, they produce two irrelevant and decades old documents which have no bearing on the confidentiality of the operating agreement as issue in this matter. If anything, these documents further establish the reasonable steps that FedEx Ground takes to ensure these documents are not publicly available as thousands of these documents are executed on a yearly basis. It should also be noted that Plaintiffs make no arguments that the terms of the Stipulated Protective Order are unreasonable or unlawful. Furthermore, the minimal inconvenience, which is common practice in litigation, caused by the confidential designation of the operating agreement under the terms of the Stipulated Protective Order is clearly outweighed by the potential economic detriment caused by the public disclosure of the operating agreement. Therefore, the Defendants continue to request the Court find the Operating Agreement is properly designated as confidential under the terms of the Stipulated Protective Order. II. Legal Authority A. Defendants Have Presented Sufficient Evidence To Establish That The Operating Agreement Is A Trade Secret And/Or Confidential Commercial Information As previously noted, California Civil Code section 3426.1(1)(d), defines “trade secret” as: (d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. In DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864, the California Supreme Court outlined the purposes underlying the protections provided by trade secret law. The court explained, ““Trade secret law promotes the sharing of knowledge, and the efficient operation of industry; it permits the individual inventor to reap the rewards of his labor . . .” (Id. at 878.) “Trade secret law also helps maintain ‘standards of commercial ethics ... .” [Citation.] ... By 2 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER C H A P M A N & IN TR IE RI , L L P At to rn ey s at La w 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 Al am ed a, CA 94 50 1 Te le ph on e: (5 10 ) 86 4- 36 00 Fa cs im il e: (5 10 ) 86 4- 36 01 10 11 12 13 14 15 16 17 18 19 20 21 99 23 24 25 26 27 28 sanctioning the acquisition, use, and disclosure of another's valuable, proprietary information by improper means, trade secret law minimizes ‘the inevitable cost to the basic decency of society when one ... steals from another.” (/d. at p. 881.) “Novelty and invention are not requisite for a trade secret as they are for patentability. In harmony with these precepts, it has been held that a trade secret in the broad sense consists of any unpatented idea which may be used for industrial and commercial purposes.” (Sinclair v. Aquarius Electronics, Inc. (1974) 42 Cal.App.3d 216, 222, citing Painton & Co. v. Bourns, Inc. (2d Cir. 1971) 442 F.2d 216, 222; accord, Rigging Internat. Maintenance Co. v. Gwin (1982) 128 Cal.App.3d 594, 613; see Sketchley v. Lipkin (1950) 99 Cal.App.2d 849, 854: “owner of an unpatented device is by legal principles protected against the piracy of his invention because it is his own by virtue of being the original product of his mind”; AvidAir Helicopter Supply, Inc. v. Rolls-Royce (8th Cir. 2011) 663 F.3d 966, 973: “[t]rade secret protection does not shield an idea from ‘infringing’ other uses of the idea; instead it protects valuable information from being misappropriated despite reasonable efforts to keep it secret”; Gabriel Technologies Corp. v. Qualcomm, Inc. (S.D.Cal., Dec. 12, 2011, No. 08cv1992 AJB (MDD)) 2011 WL 6152240, p. *5: court agreed that “a unique approach to a problem can constitute a process that is a protectable trade secret provided that the approach process is sufficiently described”.) As effectively conceded by Plaintiffs’ opposition, the operating agreement represents FedEx Ground’s unique, business model which is used to effectively and efficiently provide cargo transportation for the American consumer. The time, effort, and money put into creating this individual business model is exactly the type of confidential trade secret and commercial information that is routinely protected from widespread disclosure. Defendants are not arguing for “a standard that would justify protection of any document generated by any company” as alleged by Plaintiffs. However, Defendants are seeking to enforce protect a document that represents an 3 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER C H A P M A N & IN TR IE RI L, LL LP At to rn ey s at La w Al am ed a, CA 94 50 1 Te le ph on e: (5 10 ) 8 6 4 - 3 6 0 0 Fa cs im il e: (5 10 ) 86 4- 36 01 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 OS OO 00 uN oO 11 12 13 14 15 16 17 18 19 20 21 5B 23 24 25 26 27 28 individualized business strategy that could be exploited by competitors to the detriment of FedEx Ground. Also, despite Plaintiffs’ arguments, the trade secret only needs to be not “generally known to the public” and that the owner of the trade secret takes reasonable efforts to protect its secrecy. The fact that two prior operating agreements are available with specific, terms-of-art google searches does not change the fact that the newer versions of the operating agreement are not publicly available and that FedEx Ground takes reasonable steps to ensure that they remain private, including only producing it pursuant to stipulated protective orders. Additionally, the fact that two out of thousands of these operating agreements are available establishes that FedEx Ground takes reasonable steps to ensure their confidentiality.! It should also be noted that the sample operating agreements provided by Plaintiff are old, one from June 2002 and one from May 2007. It is common knowledge that business contracts, including these operating agreements, are modified over the years at the expense and expertise of the business operator. Plaintiffs’ logic would lead to the absurd result that any public disclosure of a decades old trade secret would negate any argument that a current trade secret could remain confidential. This would further eliminate a company’s incentive to create new trade secrets which is in conflict for the legal reasoning behind the protection of trade secrets as described by the California Supreme Court. B. There Is No Public Right To The Dissemination Of FedEx Ground’s Trade Secret And Confidential Business Information “Public access to a discovery document that is not considered or relied on by the court in adjudicating any substantive controversy does nothing to (1) establish the fairness of the proceedings, (2) increase public confidence in the judicial process, (3) provide useful scrutiny of I There is also no evidence provided by Plaintiffs to support their claim that these operating agreements are provided to competitors by independent contractors. This claim is wholly unsupported by any evidence before the Court and is specifically denied by Defendants. 4 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER C H A P M A N & IN TR IE RI L, L. L. P. At to rn ey s at L a w 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 A l a m e d a , C A 94 50 1 Te le ph on e: (5 10 ) 86 4- 36 00 Fa cs im il e: (5 10 ) 86 4- 36 01 10 11 12 13 14 15 16 17 18 19 20 2] 22 23 24 25 26 27 28 the performance of judicial functions, or (4) improve the quality of the truth-finding process.” (Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 96-97.) “There is no ‘historical tradition’ supporting a right of access to discovery materials exchanged between civil litigants. As our highest court has noted, “pretrial depositions and interrogatories are not public components of a civil trial. Such proceedings were not open to the public at common law, [citation], and, in general, they are conducted in private as a matter of modern practice. [Citations.]” (Mercury Interactive, supra, 158 Cal. App.4™ at p. 97, citing Seattle Times Co. v. Rhinehart (1984) 467 U.S. 20, 33, fn. omitted; see also H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 893: discovery is “a process that is largely a modern invention and has never been conceived as open to the public”.) “Furthermore, there is little or no ‘specific structural value of access in the circumstances’ presented as a general matter with respect to civil discovery.” (Mercury Interactive, supra, 158 Cal. App.4™ at p. 97, citing NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1201.) “Because ‘[l]iberal discovery is provided for the sole purpose of assisting in the preparation and trial, or the settlement, of litigated disputes,’ there are serious risks of abuse, not only in terms of exorbitant costs associated with it, but the exposure of private matters concerning both litigants and third parties. (Mercury Interactive, supra, 158 Cal. App.4™ at p. 98, citing Seattle Times Co. v. Rhinehart (1984) 467 U.S, supra, at p. 34.) Based upon the above long standing precedent, Plaintiffs’ arguments regarding the public’s right to disclosure of the operating agreement must fail. Lastly, Plaintiff's reliance on Raymond Handling Concepts Corp. v. Superior Court is misplaced and does not stand for the proposition asserted. In fact, Raymond Handling deals with an order allowing “disclosure [of confidential documents] only to counsel in similar cases and only if counsel executed a stipulation agreeing to be bound by the protective order.” (Raymond 5 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER C H A P M A N & IN TR IE RI , L. L. P. At to rn ey s at La w 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 A l a m e d a , C A 94 50 1 Te le ph on e: (5 10 ) 86 4- 36 00 Fa cs im il e: (5 10 ) 86 4- 36 01 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 590.) The broad interpretation of Raymond Handling requested by Plaintiff that there is an unfettered right to provide confidential documents amongst the Plaintiffs’ bar is wholly unsupported by the plain language of the ruling. “It is axiomatic that cases are not authority for propositions not considered.” (In re Marriage of Cornejo (1996) 13 Cal.4th 381, 388; see also Ulloa v. McMillin Real Estate & Mortgage, Inc. (2007) 149 Cal.App.4th 333, 340.) Also, as noted in the declaration supporting this motion, FedEx Ground routinely provides the operating agreement in discovery subject to a protective order. This is not any different than the holding in Raymond Handling. C. There Is No Prejudice To The Plaintiffs In Having The Operating Agreement Subject To The Terms Of The Stipulated Protective Order Again, Plaintiffs are opposing a motion about a document which they concede Defendants provided to them for use in this litigation and which they also concede is the very document establishing FedEx Ground's business model. Unlike most motions for protective orders based upon trade secrets, Defendants are not seeking to prohibit the disclosure of the operating agreement to the Plaintiffs in this case. Defendants are merely seeking to ensure that Plaintiffs, their lawyers, and/or experts take extra precautions to ensure that FedEx Ground’s business model is not disclosed publicly. At most, the protective order provides a small, but entirely justified, inconvenience. It should also be noted that these types of stipulated protective orders are routinely used and agreed to by the parties. In this case, Plaintiffs are not alleging that the terms of the protective order are unreasonable and/or unjustified but only that they should not apply to any business document created by FedEx Ground. As the Defendants are not seeking to withhold this confidential record from Plaintiff for use at trial, the Court should find that the terms of the protective order are reasonable and limit Plaintiffs’ use of the designated, proprietary information as previously ordered in the Stipulated Protective Order. 6 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER III. CONCLUSION Based upon the foregoing, the Defendants respectfully request that the Court grant Defendants’ motion for protective order and limit Plaintiffs’ use of the designated, proprietary information as previously ordered in the Stipulated Protective Order, and further not allow any dissemination of his deposition testimony, either by transcript, video or otherwise, under the At to rn ey s at L a w 22 36 Ma ri ne r Sq ua re Dr iv e, Su it e 30 0 A l a m e d a , C A 94 50 1 Te le ph on e: (5 10 ) 86 4- 36 00 Fa cs im il e: (5 10 ) 86 4- 36 01 C H A P M A N & IN TR IE RI , L. L. P. ~ N O Q 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 circumstances. Respectfully submitted. DATED: September 29, 2017 CHAPMAN & INTRIERI, L.L.P. By: oo gp TY Karen 7Onge John F. Baumgardner Attorneys for Defendant FEDEX GROUND PACKAGE SYSTEM, INC., CARLOS AZUCENA and LOAD N’ GO, INC. 7 REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER At to rn ey s at La w 22 36 Ma ri ne r Si Te le ph on e: (5 10 ) 8 6 4 - 3 6 0 0 C H A P M A N & I N T R I E R I L L P . Fa cs im il e: (5 10 ) 86 4- 36 01 Oo 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 i 28 John Stewart, et al. v. FedEx Ground Package Systems, Inc., et al. Los Angeles Superior Court Case No.: BC640257 Our File # 620.40 Proof of Service [ am employed in the County of Alameda, State of California. I am over the age of 18 years and not a party to the within action. I am employed by Chapman & Intrieri, L.L.P., and my business address is 2236 Mariner Square Drive, Third Floor, Suite 300, Alameda, California 94501-1090. On September 29, 2017, I served the within: e REPLY IN SUPPORT OF DEFENDANTS’ MOTION FOR PROTECTIVE ORDER on the parties in this action, by transmitting a true copy of the foregoing document(s) in the following manner: XX (BY FEDERAL EXPRESS) I caused to be delivered by Federal Express overnight delivery this date each of the above documents, to the following: Plaintiffs’ L.ead-Counsel T: 877.816.2600 JEFFREY A. BURNS, ESQ. F: 816.221.8763 J.J. BURNS, Esq. jeffb@dollar-law.com Tim DOLLAR, ESQ. jjb@dollar-law.com DOLLAR BURNS & BECKER timd@dollar-law.com 1100 MAIN STREET, SUITE 2600 KANsaAs City, MO 64105 Plaintiff Co-Counsel T: 562.436.8800 M. LAWRENCE LALLANDE, ESQ. F: 562.436.8810 KARINA N. LALLANDE, ESQ. mll@lallandelaw.com LALLANDE LAW, PLC knl@]lallandelaw.com 232 PINE AVENUE LONG BEACH, CA 90802 [ declare under penalty of perjury that the foregoing is true and correct. Executed on September 29, 2017, at Alameda, California. Hoyer KAY E.KXONOPASKE 1 Proof of Service
