United States District Court, W.D. Washington, Seattle
Honorable Richard A. Jones United States District Judge
matter comes before the Court on Plaintiff's Motion for
Protective Order, Motion to Seal, and Motion to Compel. Dkt.
## 25, 35, 36.
August 11, 2017, Plaintiff Redfin Corporation
(“Redfin”) filed this lawsuit against Defendant
iPayOne.com, LLC (“iPayOne”), seeking a
declaratory judgment that it has not misappropriated any
iPayOne trade secrets under federal law, Washington state
law, and California state law. Dkt. # 1. Redfin also seeks a
declaratory judgment that it did not breach a nondisclosure
agreement. Id. On October 30, 2017, pursuant to a
stipulation by the parties, Redfin filed an Amended Complaint
that contained further allegations regarding iPayOne's
entity status and other related allegations. Dkt. ## 20, 22.
iPayOne then filed an answer and counterclaim against Redfin
on November 2, 2017, alleging that Redfin misappropriated
iPayOne's trade secrets and breached a nondisclosure
agreement. Dkt. # 23.
Motion to Seal
preliminary matter, Redfin filed a Motion to Seal Exhibit 13
submitted in support of its Motion to Compel. Dkt. # 35.
Exhibit 13 was provided by iPayOne to Redfin and iPayOne has
designated it as confidential. Pursuant to Local Rule 5(g),
the party who designates a document confidential must provide
a “specific statement of the applicable legal standard
and the reasons for keeping a document under seal, including
an explanation of: (i) the legitimate private or public
interest that warrant the relief sought; (ii) the injury that
will result if the relief sought is not granted; and (iii)
why a less restrictive alternative to the relief sought is
not sufficient.” W.D. Wash. Local Rules LCR 5(g).
exhibit at issue is the Amended Trade Secret Identification
provided by iPayOne to Redfin. Dkt. # 38. iPayOne alleges
that it contains “confidential business information
that has not been disclosed to any person other than
Redfin.” Id. However, iPayOne's
four-sentence explanation does not meet the requirements of
Local Rule 5(g) or the applicable legal standard. iPayOne
does not provide a “specific statement of the
applicable legal standard”, the legitimate private or
public interest that warrant the relief sought, the injury
that will result if relief is not granted, and why a less
restrictive alternative to the relief sought is not
sufficient. Therefore, Redfin's Motion to Seal is
DENIED. Dkt. # 35. However, the Court gives
iPayOne leave to file a modified Response that is in
compliance with the Local Rules and applicable legal
Motion for Protective Order
district court has discretion under Federal Rule of Civil
Procedure 26(c) to limit discovery “for good cause . .
. to protect a party or person from annoyance, embarrassment,
oppression, or undue burden or expense . . . .”
Fed.R.Civ.P. 26(c)(1); Wood v. McEwen, 644 F.2d 797,
801 (9th Cir. 1981).
parties agreed that iPayOne would identify its alleged trade
secrets as part of their joint discovery plan. Dkt. # 18.
Redfin alleges that this trade secret disclosure does not
sufficiently identify the alleged trade secrets and seeks a
protective order from the Court barring further discovery
related to trade secrets until iPayOne identifies them with
more particularity. Dkt. # 25. Redfin urges the Court to
apply § 2019.210 of the California Uniform Trade Secrets
Act (“CUTSA”) to this case to prevent iPayOne
from “improperly rummaging through Redfin's
internal documents.” Dkt. # 25. Pursuant to CUTSA,
“the party alleging the misappropriation shall identify
the trade secret with reasonable particularity” before
commencing discovery relating to the trade secret. Cal. Civ.
Proc. Code § 2019.210. iPayOne does not dispute
Redfin's request to apply § 2019.210 to this case,
but argues that its' trade secret disclosure is
sufficient and in keeping with the statute's purpose of
“dissuad[ing] the filing of meritless
complaints.” Dkt. # 28.
review of iPayOne's Trade Secret Identification (Dkt. #
29 Ex. 2) and Amended Trade Secret Identification (Dkt. #
38), as well as other exhibits submitted by the parties, the
Court finds that iPayOne has identified the alleged
misappropriated trade secrets with “reasonable
particularity”. The Court notes that the purpose of
§ 2019.210 is to give notice of the issues that may
arise at trial and provide reasonable guidance in
ascertaining the boundaries of appropriate discovery. See
Openwave Messaging, Inc. v. Open-Xchange, Inc., No.
16-CV-00253-WHO, 2018 WL 692022, at *4 (N.D. Cal. Feb. 2,
2018). iPayOne's Amended Trade Secret Identification
indicates that the allegedly misappropriated trade secrets
originate out of several conference calls between iPayOne and
Redfin employees, and identifies the trade secrets as the
success metrics of certain marketing strategies and
campaigns, market research, and other aspects underlying its
“1% commission structure”. Dkt. # 38. This
information is sufficient to give Redfin notice of what
issues may arise later in this litigation as well as the
scope of appropriate discovery. As such, the Court finds that
iPayOne has sufficiently defined its trade secrets for the
purposes of § 2019.210. Redfin's Motion for
Protective Order is DENIED. Dkt. # 25.
Motion to Compel
Court has broad discretion to control discovery. Avila v.
Willits Envtl. Remediation Trust, 633 F.3d 828, 833 (9th
Cir. 2011). That discretion is guided by several principles.
Most importantly, the scope of discovery is broad. A party
must respond to any relevant discovery request that is not
privileged and that is “reasonably calculated to lead
to the discovery of admissible evidence.” Fed.R.Civ.P.
26(b)(1). The Court, however, must limit discovery where it
can be obtained from some other source that is more
convenient, less burdensome, or less expensive, or where its
“burden or expense . . . outweighs its likely benefit,
considering the needs of the case, the amount in controversy,