Glob. Protein Prods. v. Le
| Decision Date | 24 January 2023 |
| Docket Number | H048795 |
| Parties | GLOBAL PROTEIN PRODUCTS, INC., Plaintiff and Respondent, v. KEVIN K. LE et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 105CV043903
Defendants and appellants Kevin K. Le and his company West Coast AG, LLC (together, Le[1]) challenge the trial court's order denying Le's second motion to dissolve a permanent injunction that has been in force since 2006 (the injunction). The injunction prohibits Le from using a trade secret claimed by plaintiff and respondent Global Protein Products, Inc. (GPP) related to a food product for extending the shelf life of iceberg lettuce.
This is the second appeal brought by Le challenging the injunction. In 2014, GPP initiated contempt proceedings against Le for alleged violations of the injunction. During the course of those proceedings, the trial court denied Le's motion to dissolve the injunction. Le appealed, and in 2019 this court rejected Le's challenge to the injunction. (Global Protein Products, Inc. v. Le (2019) 42 Cal.App.5th 352 (Global I).)[2]
In 2020, Le filed in the trial court a second motion to dissolve the injunction. Relying on Global I, the court ruled that Le's second motion should be denied under law of the case principles. The court also concluded that Le failed to establish the requirements to dissolve an injunction set forth in Code of Civil Procedure section 533.[3]
On appeal, Le asserts the trial court erred in its ruling. GPP contends the trial court did not err and has filed in this court a motion for sanctions. As explained further below, we affirm the trial court's order and impose appellate sanctions against Le and his counsel.
GPP makes protein-based coatings that increase the shelf life of fresh produce. GPP holds patents on some of its products and claims trade secrets for others, including a trade secret in a proprietary formula and process for treating field-cored iceberg lettuce.
Kevin Le is a scientist who worked for GPP from 2000 through 2003. During his employment at GPP, which included working as the head field scientist in GPP's California office, Kevin Le learned proprietary information about GPP's products, including the identity of the organic acid GPP uses on iceberg lettuce.
Kevin Le left GPP in 2003 and formed a company called West Coast AG, LLC (WCA). WCA claimed to have proprietary products that extended the shelf-life of fresh produce (including iceberg lettuce) and directly competed for business with GPP.
In 2005, GPP brought suit against Le. GPP filed an ex parte application for a temporary restraining order and an order to show cause for a preliminary injunction and a complaint for damages alleging trade secret misappropriation in violation of the Uniform Trade Secret Act, breach of the confidentiality agreement that Kevin Le had signed in connection with his employment at GPP, and unfair competition.
The trial court granted the temporary restraining order and order to show cause. The court subsequently granted a preliminary injunction in favor of GPP.
Following further litigation, the parties reached a settlement that included a stipulated permanent injunction, which the trial court entered on January 11, 2006. The injunction enjoined Le from certain acts and included a number of stipulated facts, including that "GPP claim[ed] as a trade secret a proprietary formula and process for treating field cored iceberg lettuce to increase shelf life of the lettuce ('GPP's Trade Secret product')" and "[t]he formulation of GPP's Trade Secret product and the identity of the organic acid used in the formulation and process were disclosed to Mr. Le during his employment at GPP."
The injunction permanently enjoined Le from (1) "Acquiring, disclosing, using, or attempting or threatening to acquire, disclose, or use, GPP's Trade Secret product, including any information relating to its formulation and process and the identity of the organic acid used in said product," (2) "Directly or indirectly soliciting any of GPP's customers using GPP's Trade Secret product and/or any information related thereto," and (3) "Doing any other act using GPP's Trade Secret or any other information subject to Mr. Le's Confidentiality Agreement with GPP in order to compete with GPP."
In 2014, GPP initiated contempt proceedings against Le for alleged violations of the injunction. GPP alleged in its ex parte application for an order to show cause that it had learned through Inn Foods, Inc. and its parent company VPS Companies, Inc. (collectively, VPS) that Le was violating the injunction.[5] GPP alleged that Kevin Le had marketed to and provided VPS with certain shelf-life extender products and disclosed GPP's proprietary and confidential information.
The trial court granted the order to show cause regarding contempt (OSC). Le opposed the OSC. In the course of discovery, Le's attorney, David A. Berstein (Berstein), took the depositions of three GPP witnesses. In September 2015 Berstein deposed Bob Cyr (the then-current president and CEO of GPP). In May and June 2016, he deposed Anthony Jabar, Jr. (the former director of development at GPP) and Mark Kierstead (the founder and former president and CEO of GPP).
In July 2016, shortly following the depositions of the GPP witnesses, Le filed a motion to modify or dissolve the stipulated permanent injunction under section 533 (). Le argued the injunction was overly broad, vague, and uncertain. Additionally, Le asserted that newly discovered facts-that "citric acid" was the previously undisclosed organic acid in the stipulated permanent injunction- demonstrated that GPP's trade secret did not possess a commercial advantage, and GPP's trade secret was previously publicly disclosed in a patent.
Le's first motion to dissolve was accompanied by a declaration from Berstein. His declaration attached various exhibits, including excerpts from the depositions of Kierstead, Jabar, and Cyr. Le also submitted a declaration from Kevin Le.
In September 2016, the trial court denied Le's first motion to dissolve the stipulated permanent injunction, finding that Le failed to make the showing required under section 533. Le did not timely appeal the denial of his motion.
In December 2016, Le filed a renewed motion to modify or dissolve the stipulated permanent injunction under section 1008, subdivision (b) (renewed motion). The renewed motion was based on an admission GPP made in amended discovery responses (subsequent to the filing of the first motion to dissolve) that the organic acid used in its trade secret was sodium benzoate and asserted that GPP failed to articulate a valid trade secret. Le argued business competitors could readily ascertain the components of GPP's "so-called Trade Secret" based on this admission, because the food preservative industry had long known of sodium benzoate. The renewed motion furthermore argued that the trade secret was invalid because it claimed information in the public domain.
In support of the renewed motion, Le submitted another declaration by Berstein. This declaration attached a number of exhibits, including discovery responses by GPP and a copy of patents filed by GPP. Additionally, Le submitted the declaration of Irving S. Rappaport, a registered patent attorney, who offered a number of expert opinions about GPP's trade secret claim.
Rappaport opined that GPP failed to articulate a valid trade secret and there was no basis to continue the injunction. Rappaport discussed sworn statements made by GPP witnesses at their depositions and in court-filed declarations, including testimony by Kierstead, Jabar, and Cyr. Rappaport highlighted certain testimony to support his opinion that the court should not enforce the injunction. For example, Rappaport excerpted portions of Kierstead's deposition testimony and observed that "Kierstead, the CEO who brought the suit, cannot articulate the alleged trade secret and the Injunction is so vague, there is no way for the Court to continue the Injunction."
In 2017, the trial court denied the renewed motion, deciding that Le had failed to meet the requirements of sections 533 and 1008, subdivision (b). In 2017, Le appealed the trial court's order denying his renewed motion.
In 2019, a panel of this court issued its decision in Global I. The court in Global I determined that Le had appealed a nonappealable order-namely the order denying the renewed motion under section 1008, subdivision (b). (Global I, supra, 42 Cal.App.5th at p. 363.) This court nevertheless elected to treat the appeal as a petition for writ of mandate and addressed the merits of Le's arguments, including that GPP did not have a valid trade secret. (Id. at pp. 365-366.) This court rejected Le's claim that GPP did not have a valid trade secret and concluded there was no merit to his claim that the trial court abused its discretion in declining to dissolve the injunction under section 533 and Civil Code section 3426.2. (Global I, at pp. 367-369.)
Following the issuance of the remittitur in Global I, the trial court set the contempt proceeding for a hearing, calendared for January 19, 2021.
On November 4, 2020, Le filed a motion to dissolve the injunction under section 533 ().[6] Le argued GPP did not have a valid trade secret because it could not articulate its trade secret and had disclosed the use of sodium benzoate in certain patents. Le additionally contended that dissolution of the injunction would serve the...
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