Bayside Solutions, Inc. v. Avila

Background

This order addresses a joint letter brief about discovery disputes. Bayside Solutions, Inc. alleges that former employee Antonio Avila stole Bayside’s trade-secret information for the benefit of RecruitGigs, a company owned by Antonio’s brother, Armando Avila. Because the parties are direct competitors, they resisted broad disclosure of client information. The court had previously entered the district’s standard protective order, including a “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” designation that limits who may access sensitive materials.

Bayside complained that defendants had not timely or completely answered requests for production and interrogatories. Defendants argued that Bayside’s requests were overbroad, disproportionate to the case, and aimed at obtaining defendants’ trade-secret information that was irrelevant to Bayside’s claims. Each side also accused the other of delaying discovery.

Court’s analysis

Under Federal Rule of Civil Procedure 26(b)(1), discovery may cover nonprivileged information relevant to a claim or defense and proportional to the needs of the case. The court stated that the party resisting discovery bears the burden of explaining and supporting its objections.

The court found that both sides were partly responsible for the stalemate. Defendants improperly withheld discovery responses even though the protective order provided protections for sensitive material. The court rejected confidentiality as a reason to withhold responsive, nonprivileged information because the parties could designate materials as confidential or attorneys’-eyes-only under the protective order.

At the same time, the court found that Bayside had overreached. It identified requests seeking all documents about defendants’ customers and potential customers, information about all customers’ revenue, profits, and costs, and ten-year projections of profits, revenues, and costs. The court ruled that Bayside was not entitled to defendants’ entire business records or future-business projections.

Order

Bayside must reissue its discovery requests and limit them to the period beginning with Antonio Avila’s employment with Bayside and continuing to the present. Bayside must also limit customer-related requests to information about customers appearing on Bayside’s past and current customer lists. Either side may designate client information as confidential or attorneys’-eyes-only under the protective order.

Defendants must respond within 28 days after receiving the revised requests. For each specific request, they must provide complete responses, deadlines for completing the responses, or partial responses identifying what remains incomplete. After discovery concerning customers on Bayside’s own customer lists is completed, Bayside may pursue additional discovery after reviewing the first round of materials. The court entered the order on January 31, 2023.