Welenco, Inc. v. Corbell

Decision Date25 August 2015
Docket NumberNo. 2:13–cv–0287 KJM CKD.,2:13–cv–0287 KJM CKD.
Citation126 F.Supp.3d 1154
CourtU.S. District Court — Eastern District of California
Parties WELENCO, INC., et al., Plaintiffs, v. Gary CORBELL, et al., Defendants.

Jarom Bryce Phipps, Thomas Allen Cregger, Cregger & Chalfant LLP, Sacramento, CA, for Plaintiffs.

Joseph Alan Werner, Richard G Zimmer, T. Mark Smith, Clifford & Brown, Bakersfield, CA, Matthew C. McCartney, Eastman & McCartney LLP, San Diego, CA, Noel Thomas McCartney, McCartney & Associates, Bakersfield, CA, for Defendants.

ORDER

KIMBERLY J. MUELLER, District Judge.

Before the court are motions for summary judgment filed by defendants Gary W. Corbell, ECF No. 109, and Boredata, Inc. and Craig G. Corbell, ECF No. 110. Plaintiffs Water Well Technology, Inc. (Water Well) and Welenco, Inc. (Welenco) oppose both motions, and seek sealing of certain documents. ECF Nos. 125, 126, 127. Defendants have replied. ECF Nos. 129, 132. The court held a hearing on this matter on April 24, 2015. Jarom Phipps appeared for plaintiffs, Joseph Werner appeared for defendant Gary Corbell and Tom McCartney appeared for defendants Craig Corbell and Boredata, Inc. As set forth below, the court GRANTS IN PART and DENIES IN PART the pending motions.

I. PROCEDURAL BACKGROUND

On February 14, 2013, plaintiffs Welenco and Water Well filed a complaint against defendants Mark Sharpless, Boredata, Gary W. Corbell and Craig G. Corbell, alleging various claims related to Craig Corbell's formation of the geo-logging company Boredata, allegedly formed while Craig Corbell was still employed by Welenco and using confidential Welenco business information. See generally Compl., ECF No. 2. On March 27, 2013, Craig Corbell and Boredata filed an answer and asserted a counterclaim. ECF No. 11.

Plaintiffs filed an amended complaint, the operative complaint, on July 24, 2013, naming as defendants Gary Corbell, Craig Corbell, Mark Sharpless and Boredata Incorporated. First Am. Compl. (FAC), ECF No. 23. Plaintiffs bring eleven claims: (1) violation of the Computer Fraud and Abuse Act of 1986 (CFAA), 18 U.S.C. § 1030 ; (2) computer trespass and violation of California's Comprehensive Computer Data Access and Fraud Act (CDAFA), California Penal Code § 502, against Craig Corbell; (3) copyright infringement; (4) use of a false designation of origin in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) ; (5) false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B) ; (6) trespass to chattels against Craig Corbell; (7) violation of California Business and Professions Code § 17200 ; (8) misappropriation of trade secrets in violation of California Civil Code § 3426.1(b) ; (9) breach of written contract against Craig Corbell; (10) breach of written contract against Gary Corbell; and (11) declaratory relief against Gary Corbell. Id. On August 14, 2013, Gary Corbell filed a motion to dismiss, ECF No. 26, which Craig Corbell and Boredata joined on the same day, ECF No. 28. The court dismissed claims ten and eleven on September 26, 2013. ECF No. 35. Defendant Mark Sharpless and counterdefendant Welenco, Inc. were dismissed on November 14, 2014 upon the parties' stipulation. ECF No. 77.

On February 6, 2015, the magistrate judge granted defendants' motions to compel and ordered plaintiffs to produce responsive documents and complete interrogatories by February 13, 2015. ECF No. 99. Plaintiffs were cautioned that not complying with the order would result in the imposition of sanctions. Id. Plaintiffs nonetheless failed to comply, and on February 18, 2015, defendants Boredata and Craig Corbell moved for sanctions. ECF No. 100. Defendant Gary Corbell joined that motion. ECF No. 101. The magistrate judge held a hearing on the motion for sanctions on March 11, 2015. ECF No. 119. A day later, on March 12, 2015, the magistrate judge issued findings and recommendations, recommending the motion for sanctions be granted in part and imposing evidentiary sanctions on plaintiffs precluding them from introducing into evidence, either in opposition to summary judgment or at trial, any documents that were not produced by plaintiffs prior to February 14, 2015, and any testimony from witnesses John Duffield, Daniel Guardino, Tyler McMillan, or any person designated to testify on behalf of the corporate plaintiffs Welenco and Water Well. ECF No. 121.

On February 27, 2015, defendants filed separate motions for summary judgment. ECF Nos. 109, 110. On April 10, 2015, Water Well and Welenco filed oppositions to both motions for summary judgment.

ECF Nos. 125, 126. On April 17, 2015, Gary Corbell filed a reply and objection to declarations submitted with plaintiffs' opposition. ECF Nos. 129, 131. That same day, Craig Corbell and Boredata filed a reply and objections to evidence. ECF Nos. 132, 133.

On April 24, 2015, after summary judgment briefing was completed, the court adopted the magistrate judge's findings and recommendations on sanctions, granting the defense motion for sanctions in part, and directing the parties to file a joint statement regarding the status of documents, testimony, and declarations the court may consider in deciding summary judgment. ECF No. 138. The parties filed their joint statement on May 8, 2015, setting forth their differing positions regarding the effect of the evidentiary sanctions. ECF No. 139. The court addresses the evidentiary issues immediately below.

II. EVIDENTIARY RECORD
A. Objections

In general, evidence presented with a motion for summary judgment must be admissible. See Fed.R.Civ.P. 56(e) ; Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir.2003). At this stage, however, the court's consideration of evidence depends not on its form, but on its content. Block v. City of Los Angeles, 253 F.3d 410, 419 (9th Cir.2001). The party seeking admission of evidence "bears the burden of proof of admissibility." Pfingston v. Ronan Eng'g Co., 284 F.3d 999, 1004 (9th Cir.2002). If the opposing party objects to the proposed evidence, the party seeking admission must direct the district court to "authenticating documents, deposition testimony bearing on attribution, hearsay exceptions and exemptions, or other evidentiary principles under which the evidence in question could be deemed admissible...." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 385–86 (9th Cir.2010). Courts are generally "much more lenient" with the affidavits and documents of the party opposing summary judgment. Scharf v. U.S. Atty. Gen., 597 F.2d 1240, 1243 (9th Cir.1979).

The court acknowledges and enforces the evidentiary sanctions recommended by the magistrate judge and adopted by this court. Those sanctions exclude documents that were not produced by plaintiffs prior to February 14, 2015, and any testimony from witnesses John Duffield, Daniel Guardino, Tyler McMillan, or any person designated to testify on behalf of the corporate plaintiffs Welenco and Water Well. ECF No. 121. In the parties' joint statement, defendants do not argue any documents submitted with the motions were not produced prior to February 2015 and are therefore are barred from consideration. ECF No. 139. Neither do defendants argue that any deposition or Robert Guardino's1 declaration is inadmissible based on the sanctions. Id. Rather, defendants argue that Guardino's declaration is replete with statements that lack personal knowledge, see e.g. Guardino Decl. ¶¶ 4, 6, 7, 12, 13, 14, lack foundation, id. ¶¶ 2, 8, or are based on unauthenticated documents, id. ¶¶ 4, 6. Further, defendants argue several exhibits offered with the opposition to the motion lack the necessary foundation. Plaintiffs represent that the documents were produced in discovery prior to the February 14, 2015, the cutoff date set by the evidentiary sanctions, and were authenticated by counsel's declaration submitted with the opposition. Plaintiffs argue that at this stage, the court looks to whether the documents could be authenticated and admissible at trial through testimony by nonprecluded witnesses. They argue the evidentiary sanctions do not preclude Robert Guardino's testimony, about the documents or based on his own personal knowledge, or consideration of documents subject to the business records exception of the hearsay rule.

1. Guardino Declaration

Defendant Gary Corbell objects to the declaration of Robert Guardino and documents attached to the declaration of Jarom Phipps in opposition to the motion, all of which were produced in the course of discovery. ECF No. 131. Defendants Craig Corbell and Boredata also object to Guardino's declaration and the same discovery documents. ECF No. 133.

Specifically, Craig Corbell and Boredata object to the majority of statements in Guardino's declaration as argumentative, lacking foundation, lacking personal knowledge, and say Guardino is not competent to testify on the matters his declaration addresses. ECF No. 133 at 2–5. To the extent Guardino's statements lack personal knowledge, and the court agrees that many do not, see, e.g., Guardino Decl. ¶¶ 2, 3, 4, the court sustains the objections and does not rely on these statements in reaching its decision.

2. Document Containing Statement By McMillan

Gary Corbell also objects to a document attached to the opposition, WEL 0538–40, containing a statement by Tyler McMillan who refused to be deposed. Based on the evidentiary sanctions, Mr. McMillan's testimony may not be used as evidence. The document here, however, was produced prior to February 14, 2015, and may be considered.2

3. Documents Challenged as Not Property Authenticated

Defendants Craig Corbell and Boredata object to several other documents attached to the opposition as lacking authentication. Jarom Phipps, plaintiffs' counsel, authenticated the documents as documents produced in discovery. "Documents produced in response to discovery requests are admissible on a motion for summary judgment since they are self-authenticating and constitute the admissions of a party opponent." Anand v. BP W. Coast Products LLC, 484...

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