Thursday, February 6, 2003
Page 1
C.A. Approves Use of Injunction to Preserve Discoverable Material
By KENNETH OFGANG, Staff Writer/Appellate Courts
Parties seeking to prevent loss of discoverable evidence are not limited to the remedies prescribed by the Civil Discovery Act and may be entitled to injunctive relief, the Fourth District Court of Appeal ruled yesterday.
Div. Two held that a San Bernardino Superior Court judge did not abuse his discretion by ordering the defendants in a trade secrets suit not to destroy, alter or secrete electronically stored data to which the plaintiffs were seeking access.
The plaintiff in the case is an insurance brokerage which claims it fired the defendants, several of its former employees, after learning they were planning to take copies of documents from the company’s files and computer storage with them to a new firm.
Stolen Secrets Claimed
Dodge, Warren & Peters Insurance Services, Inc. alleges that the defendants—James W. Riley, Sandra L. McGovern, Patricia Anaya, and Parthena York—copied and took company files with them prior to their departure. After suing for trade secrets misappropriation, unfair business practices, breach of fiduciary duty, and breach of contract, the firm requested production of the data for inspection and copying and an injunction to prevent loss of the data prior to its being produced.
The defendants responded with a motion for a protective order. Superior Court Judge Ben Kayashima, who has since retired, denied the protective order and granted the injunction.
In concluding that Kayashima acted within his discretion, Presiding Justice Manuel Ramirez, writing for the Court of Appeal, rejected the contention that the plaintiff’s remedies were limited to statutory discovery sanctions.
“[W]e are unconvinced that the availability of sanctions for misuse of the discovery statutes establishes an adequate remedy at law for the preservation of evidence,” Ramirez wrote.
The jurist distinguished Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, in which the high court held that there is no tort remedy for intentional spoliation of evidence.
While precluding the victim of intentional spoliation from suing for tort damages, Ramirez reasoned, the high court did not say that there could be no remedy outside the scope of the discovery statutes.
The presiding justice went on to conclude that the plaintiff made an adequate showing to obtain an injunction.
Jurist’s Reasoning
Under the circumstances, Ramirez reasoned, the requirements that plaintiff show a probability of prevailing and irreparable harm apply only to the merits of the discovery dispute, not the case as a whole.
Thus, he explained, the firm had to establish a probability that it was entitled to discovery, and that its ability to obtain that discovery would be irreparably harmed without an injunction, but did not have to show it was likely to win the suit.
The test was met, Ramirez said.
“The record shows that in addition to photocopying thousands of documents, Defendants copied many of Dodge’s computer files onto discs and took them offsite for later use at the new agency, “ he wrote. “Defendants admit having taken voluminous files from Dodge. The computers may also contain other evidence supportive of Dodge’s causes of action....In light of these facts we cannot say that the trial court here abused its discretion in determining that Defendants’ computer and electronic storage media contained information that Dodge would have a right to discover.”
Ramirez also said it was premature to consider what discovery, if any, the firm would ultimately be entitled to or whether it may recover attorney fees from two defendants with whom it had written employment contracts.
The case is Dodge, Warren & Peters Insurance Services, Inc. v. Riley, E031719.
Copyright 2003, Metropolitan News Company