Smarter Hoa Solutions Inc. v. Pena

United States District Court for the Southern District of California

Smarter Hoa Solutions Inc. v. Pena

Trial Court Opinion

1 2 3 4 5 6 7 8 9 10 11 12 UNITED STATES DISTRICT COURT 13 SOUTHERN DISTRICT OF CALIFORNIA 14 15 SMARTER HOA SOLUTIONS INC., Case No.: 24-cv-01781-JAH-MMP

16 Plaintiff, ORDER DENYING IN 17 v. SUBSTANTIAL PART MOTION FOR PROTECTIVE ORDER 18 CARMEN PEÑA and CASANET

PROPERTY MANAGEMENT LLC, 19 [ECF No. 34] Defendants. 20

21 22 This action involves a non-competition and non-disclosure agreement entered 23 between Plaintiff and Defendant Peña in connection with Plaintiff’s purchase of Defendant 24 Peña’s business. ECF No. 1 ¶ 9. Relevant here, Plaintiff contends Defendant Peña violated 25 the terms of the agreement by soliciting Plaintiff’s customers and directly competing with 26 Plaintiff. Id. ¶¶ 13–14. Plaintiff brings claims for breach of contract and related claims, 27 conversion, and trade secret misappropriation under both the Defend Trade Secrets Act and 28 California Civil Code section 3426. See generally id. 1 On July 21, 2025, the Honorable John A. Houston, District Judge, entered an order 2 construing Defendant Peña’s pending motion to dismiss, ECF No. 20, as a motion for 3 judgment on the pleadings under Federal Rule of Civil Procedure 12(c). ECF No. 33. In 4 the same Order, Judge Houston stayed all proceedings except two court-ordered discovery 5 deadlines, which required Defendant Peña to respond to the pending Requests for 6 Admission and Interrogatories by July 18, 2025 and to respond to pending Requests for 7 Production of Documents by July 25, 2025. Id. Apart from these two deadlines, all other 8 deadlines are stayed pending disposition of Defendant Peña’s motion for judgment on the 9 pleadings, which is set for hearing on August 27, 2025. Id. 10 On the same day the Court entered the Order staying the case, Defendant Peña filed 11 a Notice of Motion and Motion for Protective Order, the Court’s model protective order, a 12 Declaration in support of the protective order, and Memorandum of Points and Authorities. 13 ECF No. 34. Because Defendant Peña is proceeding pro se, the Court construes her filings 14 liberally. Erickson v. Pardus,

551 U.S. 89, 94

(2007). Defendant Peña’s motion for 15 protective order addresses both the validity of her non-complete agreement that is the 16 subject of her motion for judgment on the pleadings as well as “the appropriate boundaries 17 of discovery in this litigation.” ECF No. 34 at 3. With respect to discovery, Defendant Peña 18 argues generally discovery is improper because Plaintiff has failed to sufficiently identify 19 the alleged trade secret as required by California Civil Procedure Code section 2019.210, 20 despite several attempts to meet and confer. ECF No. 34-3 at 5. 21 I. LEGAL STANDARD 22 Federal Rule of Civil Procedure 26(c) authorizes a party from whom discovery is 23 sought to “move for a protective order in the court where the action is pending[.]” Fed. R. 24 Civ. P. 26(c)(1). “The court may, for good cause, issue an order to protect a party or person 25 from annoyance, embarrassment, oppression, or undue burden or expense” including: 26 (A) forbidding the disclosure or discovery;

27 (B) specifying terms, including time and place or the allocation of expenses, 28 for the disclosure or discovery; 1 (C) prescribing a discovery method other than the one selected by the party 2 seeking discovery; 3 (D) forbidding inquiry into certain matters, or limiting the scope of disclosure 4 or discovery to certain matters; 5 (E) designating the persons who may be present while the discovery is 6 conducted; 7 (F) requiring that a deposition be sealed and opened only on court order; 8

9 (G) requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified 10 way; and 11 (H) requiring that the parties simultaneously file specified documents or 12 information in sealed envelopes, to be opened as the court directs. 13 14 Fed. R. Civ. P. 26(c)(1). “The burden is on the person seeking the protective order to 15 demonstrate good cause.” Grano v. Sodexo Mgmt., Inc.,

335 F.R.D. 411

, 414 (S.D. Cal. 16 2020). The moving party must show “specific prejudice or harm will result if no protective 17 order is granted.” Phillips ex rel. Estates of Byrd v. Gen. Motors Corp.,

307 F.3d 1206

, 18 1210–12 (9th Cir. 2002). “The court has wide discretion to determine what constitutes a 19 showing of good cause and to fashion a protective order that provides the appropriate 20 degree of protection.” Grano, 335 F.R.D. at 414. 21 “The motion must include a certification that the movant has in good faith conferred 22 or attempted to confer with other affected parties in an effort to resolve the dispute without 23 court action.” Fed. R. Civ. P. 26(c)(1). If the motion “is wholly or partly denied, the court 24 may, on just terms, order that any party or person provide or permit discovery.” Fed. R. 25 Civ. P. 26(c)(2). 26 / / 27 / / 28 / / 1 II. ANALYSIS 2 Even construing the motion for protective order liberally (as the Court must for pro 3 se litigants),1 it is unclear precisely what discovery relief Defendant Peña seeks in light of 4 the current stay of all deadlines in the proceeding, with two exceptions discussed below, 5 pending disposition of Defendant Peña’s motion for judgment on the pleadings. 6 The only two deadlines excepted from this stay were Defendant Peña’s responses to 7 then-pending Requests for Admission and Interrogatories by July 18, 2025 and to then- 8 pending Requests for Production of Documents by July 25, 2025—deadlines this Court 9 ordered following this July 11, 2025 Status and Discovery Conference with all parties. ECF 10 Nos. 29, 31, 32. In her motion for protective order, Defendant Peña does not address 11 whether she complied with these deadlines, nor does she identify any specific—or even 12 general—discovery requests to which she seeks a protective order. 13 Rather, Defendant Peña appears to contend discovery generally is improper because 14 Plaintiff has failed to comply with California Civil Procedure Code section 2019.210, 15 which provides: 16 In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act . . . before commencing discovery relating to the trade 17 secret, the party alleging the misappropriation shall identify the trade secret 18 with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code. 19

20

Cal. Civ. Proc. Code § 2019.210

. Defendant Peña asserts Plaintiff has failed to sufficiently 21 identify the alleged trade secret as required by section 2019.210 despite several attempts 22 to meet and confer. ECF No. 34 at 2, 34-5. 23 As a preliminary matter, the Court notes district courts are split on whether 24 California Civil Procedure Code section 2019.210 applies in federal courts. Some district 25 26 27 1 The motion is procedurally improper because, among other reasons, no leave of court was obtained prior to filing this motion. Civil Chambers Rule X(E) (“A motion seeking to 28 1 courts have found section 2019.210, and in particular, its “reasonable particularity” rules 2 apply in federal court. See Yeiser Rsch. & Dev., LLC v. Teknor Apex Co., No. 17-cv-1290- 3 BAS-MSB,

2019 WL 2177658

, at *3–4 (S.D. Cal. May 20, 2019); Gabriel Techns. Corp. 4 v. Qualcomm Inc., No. 08-cv-1992-AJB-MDD,

2012 WL 849167

, at *3–4 (S.D. Cal. Mar. 5 13, 2012). Other federal courts have refused to apply state law trade secrets discovery rules 6 in federal court, finding such laws conflict with the Federal Rules of Civil Procedure. See 7 Hilderman v. Enea TekSci, Inc., No. 05-cv-1049-BTM-AJB,

2010 WL 143440

, at *2–3 8 (S.D. Cal. Jan 8, 2010); Freeman Inv. Mgmt. Co., LLC v. Frank Russell Co., No. 13-cv- 9 2856-JLS-RBB,

2015 WL 13828591

, at *3 (S.D. Cal. July 30, 2015). 10 However, the Court need not reach this issue. The only two deadlines excepted from 11 the stay have passed, and all remaining deadlines—including any other discovery-related 12 deadlines—are stayed pending resolution of the pending motion for judgment on the 13 pleadings. Accordingly, to the extent Defendant Peña seeks a protective order under Rule 14 26(c) from discovery generally based on Plaintiff’s alleged failure California Civil 15 Procedure Code section 2019.210, the Court DENIES the motion without prejudice. 16 Defendant Peña may refile, as appropriate and in compliance with this Court’s Chambers 17 Rules, when the stay is lifted. 18 Defendant Peña’s motion also includes a proposed version of the Court’s model 19 protective order. ECF No. 34-1. The Court construes this liberally as a request for entry of 20 the Court’s model protective order and GRANTS the request. The Court will provisionally 21 enter its model protective order pending resolution of the motion for judgment on the 22 pleadings. In the event Plaintiff or Defendant Casanet Property Management LLC have 23 any objections to the model protective order, the Court will provide them an opportunity 24 to raise objections, as appropriate, following District Judge Houston’s resolution of the 25 motion for judgment on the pleadings. 26 Finally, to the extent the motion for protective order addresses the legality and 27 enforceability of the nondisclosure and non-compete agreements, Defendant Peña shall 28 | ||raise any arguments regarding this issue in connection with her briefing on the pending 2 motion for judgment on the pleadings. 3 CONCLUSION 4 For the above reasons, the Court DENIES IN SUBSTANTIAL PART Defendant 5 || Pefia’s motion for protective order, ECF No. 34. 6 IT IS SO ORDERED. 7 Dated: August 8, 2025 Wyble. th. ea g HON. MICHELLE M. PETTIT 9 United States Magistrate Judge

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Reference

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