United States District Court, D. Nevada
ORDER (DOCKET NO. 247)
J. KOPPE United States Magistrate Judge
before the Court is Plaintiff's amended motion to strike
“attorneys' eyes only” designation from
source code in favor of the designation
“confidential” pursuant to the amended stipulated
protective order. Docket No. 247. Defendant Vincent Tessier
filed a response, and Plaintiff filed a reply. Docket Nos.
259, 270. The Court finds his motion properly resolved
without oral argument. See Local Rule 78-1. For the
reasons discussed below, Plaintiff's motion, Docket No.
247, is hereby GRANTED.
action was initially removed from state court on December 18,
2015. Docket No. 1. Before removal, the parties filed a
stipulated protective order in the state court action. Docket
No. 247-5. Defendants Tessier and Christelle Pigeat
subsequently moved for a protective order that, inter
alia, would include an attorneys' eyes only
(“AEO”) provision that would apply to the source
code for ABreez, a product sold by their company, Mobile
Simple Solutions (IAS), Inc. (“Mobile Simple”).
Docket No. 247-3. Plaintiff opposed that motion. Docket No.
247-6. The state court ultimately held a hearing, granted
Defendants' motion in part, and ordered that all source
code must be provided enhanced protection. Docket No. 247-7.
The parties then negotiated a blanket protective order,
including an AEO provision to be applied to the source code,
which the state court entered on August 19, 2015. Docket No.
247-8 at 5-22. The parties subsequently exchanged source code
subject to the AEO provision of the stipulated protective
order. Docket Nos. 247-9, 247-10.
September 28, 2016, unbeknownst to Bartech, Defendant Mobile
Simple sold the ABreez source code. See, e.g.,
Docket No. 247 at 7. On February 3, 2017, after discovering
the sale, Plaintiff filed a motion to strike the AEO
designation from the source code in favor of the designation
“confidential” pursuant to the parties'
amended stipulated protective order. Docket No. 218. On
February 14, 2017, the Court stayed this action as to
Defendant Pigeat. Docket No. 232. On March 10, 2017, the
Court denied without prejudice Plaintiff's motion to
strike because it was filed before the Court stayed the case
as to Defendant Pigeat. Docket No. 241. The Court allowed
Plaintiff to file a renewed motion to strike that addresses
how the stay as to Defendant Pigeat affects the relevant
March 17, 2017, Plaintiff filed the instant motion. Docket
No. 247. Plaintiff submits that the stay as to Defendant
Pigeat does not impact its motion to strike because,
inter alia, Defendant Pigeat no longer has an
interest in the ABreez source code since her company sold it.
Id. at 3-4. Defendant Tessier does not appear to
contest this assertion, though he apparently purports to
speak on behalf of both himself and Defendant Pigeat.
See, e.g., Docket No. 259 at 2 (“Although
Tessier and Miss Pigeat are no longer administrators and
co-owners of Mobile Canada . . . they nevertheless want to
protect the logic on how ABreez Software was
developed”). Having independently reviewed
Plaintiff's analysis on this issue, the Court finds that,
as Plaintiff submits, the stay as to Defendant Pigeat does
not affect the instant motion. The Court therefore addresses
the substance of the motion below.
preliminary matter, the Court may properly adopt and apply
the parties' stipulated protective order, though it was
issued by a state court. After removal, “[t]he federal
court treats everything that occurred in the state court as
if it had taken place in federal court.” Carvalho
v. Equifax Info. Servs., LLC, 629 F.3d 876, 887 (9th
Cir. 2010) (internal quotation marks and alterations omitted)
(quoting Butner v. Neustadter, 324 F.2d 783, 785
(9th Cir. 1963)). Therefore, “an order entered by a
state court should be treated as though it had been validly
rendered in the federal proceeding.” Carvalho,
629 F.3d at 887 (internal quotation marks omitted) (quoting
Butner, 324 F.2d at 785). Additionally, this Court
retains the “authority to dissolve or modify a state
court order that was entered prior to removal.”
Kogok v. T-Mobile USA, Inc., 2013 WL 1942211, at *1
(S.D. Cal. May 9, 2013) (citing 28 U.S.C. § 1450). The
Court therefore adopts the protective order entered in the
state court case and treats it as though it had been rendered
in this Court.
submits that this Court should designate the ABreez source
code “confidential” rather than applying the AEO
provision to it in order to facilitate better preparation for
trial. Docket No. 247 at 11-12. In particular, Plaintiff
submits that “Defendant Tessier has an unfair advantage
at trial due to his extensive personal knowledge of
Bartech's source code, whereas neither Bartech nor its
employees have any familiarity with the ABreez code.”
Id. at 11. Plaintiff contends that removing the AEO
designation in favor of a “confidential”
designation would improve its ability to trace
Defendants' alleged misappropriation of its own source
code. Id. at 11-12. Plaintiff further asserts that
this Court may properly change the designation because the
initial rationale underlying the application of the AEO
provision to the ABreez source code no longer applies.
Id. at 5-7, 9, 12. Specifically, Plaintiff submits,
in the state court litigation, Defendants submitted that
revealing the ABreez source code to Plaintiff's employees
“would destroy Defendants' competitive
advantage” absent “a prima facie showing
that this information was misappropriated or otherwise
belongs to [Plaintiff].” Docket No. 247-3 at 5 (italics
not in original). At this point in the litigation, however,
Plaintiff submits that Defendants have sold the source code,
and that the Court has found that “[Plaintiff] is . . .
likely to succeed on the merits of its misappropriation
claim.” See, e.g., Docket No. 247 at 5; Docket
No. 96 at 15. Plaintiff also submits that the ABreez source
code would still enjoy sufficient protection if designated
“confidential, ” and that Plaintiff would agree
to also have its own source code designated
“confidential.” Docket No. 247 at 5, 7-8.
Tessier responds that, though he no longer owns ABreez, he
“still want[s] to protect the logic on how ABreez
Software was developed.” Docket No. 259 at 2. Defendant
Tessier also submits that Plaintiff has improper motives in
seeking to remove the AEO protection from the ABreez source
code. Id. at 3-6. Defendant Tessier further contends
that Plaintiff's counsel have already had the source code
in their possession for quite some time and that Plaintiff
should be able to continue its investigation through experts.
Id. at 6. Plaintiff replies that the Abreez source
code will remain amply protected as
“confidential” under the stipulated protective
order, that one of this Court's prior orders supports
granting the relief Plaintiff requests, and that known facts
disprove Defendant Tessier's contention about
Plaintiff's motives. Docket No. 270 at 3-6.
Court agrees with Plaintiff. Defendant Tessier no longer
possesses any interest in the ABreez source code because his
company sold it. See, e.g., Docket No. 247 at 5.
Moreover, aside from conclusory assertions about
Plaintiff's motives, Defendant Tessier has not explained
how designating the source code as “confidential”
rather than applying the AEO provision to it would harm him.
See, e.g., Beckman Indus., Inc. v. Int'l
Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (internal
citation omitted) (“‘Broad allegations of harm,
unsubstantiated by specific examples or articulated
reasoning, '” are insufficient to show good cause
for protection under Rule 26(c)); see also Wells Fargo
Bank, N.A. v. Iny, 2014 U.S. Dist. Lexis 78875, at *8
(D. Nev. June 9, 2014) (internal citation omitted)
(“When a confidentiality designation is challenged, the
burden of persuasion to show good cause for such a
designation rests upon the designating party”).
Additionally, Defendant Tessier provides no authority that
would require the Court to apply the AEO designation to the
source code. See Local Rule 7-2(d) (“The
failure of an opposing party to file points and authorities
in response to any motion, ” absent an exception not
applicable here, “constitutes a consent to the granting
of the motion”). Thus, the Court is not persuaded that
it is necessary to apply the AEO provision of the stipulated
protective order to the Abreez source code.
reasons discussed above, Plaintiffs amended motion to strike
“Attorneys' Eyes Only” designation, Docket
No. 247, is hereby GRANTED. The source code
at issue in this case no longer falls under the AEO provision
of the parties' ...