Bayside Solutions, Inc. v. Avila

Background

Bayside Solutions, Inc. brought the action against Antonio Avila, Armando Avila, and RecruitGigs. The complaint asserted eight causes of action, including claims under the federal Defend Trade Secrets Act and California’s Uniform Trade Secrets Act. Bayside moved for entry of a protective order governing discovery.

Bayside’s proposed order was nearly identical to the Northern District of California’s model protective order for litigation involving patents, highly sensitive confidential information, and trade secrets. The parties agreed that the model order was instructive. The defendants objected to language allowing a party to designate materials as “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY,” commonly called an “AEO” designation.

Court’s Analysis

Federal Rule of Civil Procedure 26(c) allows a court, upon a showing of good cause, to protect a party or person from undue burden or expense and to restrict disclosure of trade secrets or other confidential research, development, or commercial information. A party seeking protection must show that specific harm or prejudice could result without the order.

The court found that Bayside had shown disclosure of its trade secrets and confidential business information to the defendants could cause competitive harm. Bayside anticipated needing to disclose financial information, customer names, employee lists, business proposals, and business pitches. Although Bayside had not yet designated any materials as AEO, the proposed order allowed any party or nonparty to challenge a confidentiality designation at any time. The court concluded that the order therefore would not prejudice the defendants.

Disposition

The court granted Bayside’s motion for entry of its proposed protective order. It directed that the proposed order be filed as a standalone document. The opinion addressed protection of discovery materials and did not decide the underlying trade-secret claims.