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SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
MINUTE ORDER
SUNPOWER CORPORATION vs MARTIN DEBONO et al Hearing Start Time: 9:00 AM
19CV349042 Hearing Type: Motion: Quash
Date of Hearing: 09/10/2019 Comments: 6
Heard By: Pierce, Mark H Location: Department 2
Courtroom Reporter: —- No Court Reporter Courtroom Clerk: Mai Jansson
Court Interpreter:
Court Investigator:
Parties Present: Future Hearings:
Neukom, John McMakin Attorney
Exhibits:
- Matter not heard. Tentative adopted as follows:
Currently before the Court is the motion by defendants Standard Industries, Inc. (Standard ) and GAF Energy
to quash discovery and for an order barring further discovery until plaintiff SunPower Corporation ( SunPower
) provides an adequate trade secret designation under Code of Civil Procedure section 2019.210.
Factual and Procedural Background
This action arises out of defendant Martin DeBono s ( DeBono ) alleged misappropriation of SunPower s
proprietary information and trade secrets. According to the allegations of the complaint, DeBono was
SunPower s Executive Vice President of Global Channels and responsible for SunPower s rooftop solar
business. (Complaint, 1.) When he started at SunPower, DeBono signed a non-disclosure agreement
whereby he agreed to safeguard SunPower s confidential information and work exclusively for SunPower
during his employment. (Id. at 84.) DeBono later signed an employment agreement, in which he agreed not
to actively engage in any other employment without his supervisor s prior approval. (Id. at 85.)
While he was still employed with SunPower, DeBono began covertly working for Standard. (Complaint, 3.)
Specifically, DeBono drafted materials and a PowerPoint presentation related to how Standard could take
over the integrated rooftop solar market, forwarded proprietary and confidential emails to a private email
account, and uploaded over 1,700 SunPower files to a private OneDrive account. (Id. at 3-5, 47-49, 52.) The
emails contained confidential guidance to SunPower s sales team on how to explain in detail to prospective
and existing customers why SunPower s solar offerings are better than the competition, a roadmap on
different ways to differentiate and distinguish the competition, often through use of technical and product
testing data, and confidential and proprietary information about SunPower s sales strategy approach and
execution. (Id. at 3 &47.) The files uploaded to the OneDrive account contained confidential technical
information regarding SunPower s research and development of products and technology, a confidential
analysis of different ways to differentiate and distinguish the competition, often through use of technical and
product testing data, and proprietary, confidential, and trade secret information about SunPower s sales
strategy approach and execution, product development, market analysis, dealer relationships, and strategic
initiatives. (Id. at 5,53, & 54.)
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When DeBono left SunPower on April 6, 2018, he entered into a separation agreement whereby he agreed to
return all SunPower files and documents, not use any confidential and/or proprietary information for the
benefit of any third party, and not solicit SunPower employees for one year. (Complaint, 2 & 86-89.)
However, DeBono allegedly left with over 1,700 SunPower files providing a roadmap on how to build a
successful solar business. (Complaint, 2.) These files included hundreds of SunPower confidential and
proprietary documents . (Ibid.)
DeBono is now president of GAF Energy, Standard s new rooftop solar division. (Complaint, 1.) DeBono
immediately began using SunPower s confidential information to solicit and target other SunPower
employees for hiring by Standard to build its new rooftop solar division, GAF Energy. (Id. at 2, 7, & 58.)
DeBono allegedly stole SunPower s proprietary information and trade secrets to help Standard and GAF
Energy leapfrog past years of work needed to develop and market an integrated rooftop solar product. (Id.
at 1,8,9, & 38-42.)
Based on the foregoing allegations, SunPower filed its complaint against DeBono, Standard, and GAF Energy
(collectively, Defendants ), alleging causes of action for: (1) trade secret misappropriation; (2) breach of
written contract; (3) breach of duty of loyalty; (4) aiding and abetting breach of duty of loyalty; and (5)
violation of Penal Code section 502.
Discovery Dispute
In June 2019, SunPower served Defendants with a trade secret designation pursuant to Code of Civil
Procedure section 2019.210. (Kao Dec., 3, Ex. 1.) Therein, SunPower identified its trade secrets allegedly
misappropriated by Defendants as:
1. The SunPower files listed on Exhibit 1 the May 30, 2019 report entitled Martin DeBono OneDrive Data
Collection prepared by Kivu Consulting, Inc. ( Kivu ), and any information derived, modified, or copied
therefrom. []
2. The 61 internal SunPower emails authored by Cole Peyton that Mr. DeBono emailed to his personal
live.com email account on October 31, 2017, and any information derived, modified, or copied therefrom. [ ]
(|bid.)
With respect to its first identified trade secret, SunPower stated:
These files are compilations of sensitive and/or confidential business, sales, marketing, and product
information that SunPower invested significant time and money in researching and constitute trade secrets
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because they are extremely valuable work product that is not known to SunPower s competitors. The files
include a compilation of information on confidential strategic initiatives, partnership agreements, pricing and
cost information, competitor analysis, manufacturing information, sales strategies, marketing and advertising
plans, for both existing and planned products, personnel information and product research and development.
(Kao Dec., 3, Ex. 1.) SunPower advised that [a] redacted copy of the Kivu report that lists these trade secret
files is attached to the [p]ublic version of this disclosure as Exhibit A. (Ibid.) SunPower further stated, There
are over 1,700 other documents on the forensic report produced by Kivu and DeBono has taken a complete
library of SunPower proprietary and confidential information, including a compilation of SunPower s most
valuable trade secrets. (Ibid.) SunPower then explained that [t]he documents, described in the bullet points
below, are examples of the 1,700+ documents listed on Exhibit A to this Disclosure that DeBono uploaded to
his private OneDrive account, and then accessed after he left SunPower on April 6, 2018, that contain
confidential, proprietary, and trade secret information, that is highly valuable to SunPower. (Ibid.)
Thereafter, SunPower described specific documents and categories of documents (e.g., Quarterly Operations
Review Reports and 2017 KI Targets_Residential Cost Roadmap_Reference System ) that contain highly
confidential information regarding SunPower s most valuable trade secrets and confidential business
information. (Ibid.)
With respect to its second identified trade secret, SunPower stated
These emails are weekly training emails sent to SunPower s sales managers with advice about SunPower s
sales strategy approach and execution. This information is valuable to SunPower as a compilation because it
is not generally known by SunPower s competitors. These sales team e-mails are SunPower s guidance to its
sales team on how to explain to customers why SunPower s products are better than the competition. The e-
mails provide a roadmap on different ways to differentiate the competition s offerings relative to SunPower s
products.
(Kao Dec., 3, Ex. 1.) SunPower advised that [a] copy of the DeBono s forwarding emails that list the names
of the confidential internal SunPower emails is attached to the Public Version of this disclosure as Exhibit B.
(Ibid.)
The next month, SunPower served Standard with requests for admission, set one ( RFA), form
interrogatories, set one ( Fl ), special interrogatories, set one ( SI ), and requests for production of documents,
set one (RPD). (Kao Dec., 5-8, Exs. 3-6.) SunPower also served Defendants with a deposition notice for
DeBono, which included several requests for production of documents. (Id. at 4, Ex. 2.)
Thereafter, counsel for the parties met and conferred regarding SunPower s pending discovery and the
sufficiency of SunPower s trade secret designation. (Kao Dec., 2; Fogarty Dec., 17.) Specifically, Standard
and GAF Energy asserted that SunPower s trade secret disclosure was inadequate. (|bid.) Despite these meet
and confer efforts, counsel for the parties were unable to informally resolve the discovery dispute. (Ibid.)
Consequently, on July 19, 2019, Standard and GAF Energy filed the instant discovery motion. SunPower filed
papers in opposition to the motion on August 27, 2019. On September 3, 2019, Standard and GAF Energy filed
a reply.
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Discussion
Pursuant to Code of Civil Procedure sections 1987.1, 2019.210, and 2025.410, Standard and GAF Energy
move to quash the deposition notice for DeBono, RFA, FI, SI, and RPD, and for an order barring further
discovery until SunPower provides an adequate trade secret designation under Code of Civil Procedure
section 2019.210. (Ntc. Mtn., p. 2:4-16.)
|. Request for Order Quashing Discovery
Standard and GAF Energy initially ask the Court to quash the deposition notice for DeBono, RFA, FI, SI, and
RPD because SunPower s trade secret designation is inadequate under Code of Civil Procedure section
2019.210.
A basic principle of motion practice is that the moving party must specify for the court and the opposing
party the grounds upon which that party seeks relief. (Luri v. Greenwald (2003) 107 Cal.App.4th 1119, 1125.)
Standard and GAF Energy cite Code of Civil Procedure sections 1987.1, 2019.210, and 2025.410 as the legal
basis for their motion.
But these provisions do not authorize a motion to quash discovery requests such as the RFA, Fl, SI, and RPD.
Code of Civil Procedure section 1987.1 governs subpoenas. Code of Civil Procedure section provides that [i]n
any action alleging the misappropriation of a trade secret , before commencing discovery relating to the
trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable
particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code. The
statute itself does not authorize any type of motion. Furthermore, Code of Civil Procedure section 2025.410
only governs deposition notices. Thus, Standard and GAF Energy have not provided a legal basis, and the
Court is aware of none, for quashing the RFA, FI, SI, and RPD.
Additionally, Standard and GAF Energy have not provided a legal basis for quashing the deposition notice for
DeBono. Code of Civil Procedure section 2025.410 the only statute cited by Standard and GAF Energy
pertaining to deposition notices authorizes motions to quash a deposition notice on the grounds that the
deposition notice does not comply with Article 2 for the Discovery Act (i-e., Code of Civil Procedure sections
2025.210 through 2025.290). (Code Civ. Proc., 2025.310, subds. (a)-(c); CJER, Cal. Judges Benchbook, Civil
Proceedings-Discovery (2019), 15.16 [setting forth the grounds for a motion to quash under Code of Civil
Procedure section 2025.410].) In other words, such a motion may be brought based on an error or irregularity
in the deposition notice. Here, the motion is not based on an error or irregularity in the deposition notice.
Rather, the motion is brought on the ground that SunPower s trade secret designation is inadequate under
Code of Civil Procedure section 2019.210. Standard and GAF Energy have not identified any legal authority,
and the Court is aware of none, providing that this is a proper basis for a motion to quash under Code of Civil
Procedure section 2025.410.
In fact, case law demonstrates that a party should, instead, move for a protective order if they contend
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discovery should not proceed because a trade secret designation is insufficient. (See, e.g., Perlan
Therapeutics, Inc. v. Super. Ct. (2009) 178 Cal.App.4th 1333, 1336 (Perlan); Brescia v. Angelin (2009) 172
Cal.App.4th 133, 139 (Brescia); Advanced Modular Sputtering, Inc. v. Super. Ct. (2005) 132 Cal.App.4th 826,
831 (Advanced Modular).)
Accordingly, Standard and GAF Energy s motion is DENIED to the extent it seeks to quash the deposition
notice for DeBono, RFA, FI, S|, and RPD.
ll. Request for Order Barring Discovery
Standard and GAF Energy also ask the Court for an order barring further discovery until plaintiff SunPower
Corporation ( SunPower ) provides an adequate trade secret designation under Code of Civil Procedure
section 2019.210.
Asa preliminary matter, the statutes cited by Standard and GAF Energy as the legal basis for their motion
Code of Civil Procedure sections 1987.1, 2019.210, and 2025.410 do not authorize motions for an order
staying discovery on the ground that a trade secret designation is inadequate.
Nonetheless, several statutes authorize motions for such a protective order. (See e.g., Code Civ. Proc.,
2019.020, subd. (b) [ on motion and for good cause shown, the court may establish the sequence and timing
of discovery for the convenience of parties and witnesses and in the interests of justice ], 2025.420, subds.
(a)-(b) [before a deposition, any party may promptly move for a protective order protect the party from
unwarranted annoyance, embarrassment, or oppression, or undue burden and expense], 2030.090, subds.
(a)-(b) [when interrogatories have been propounded, any party may promptly move for a protective order
protect the party from unwarranted annoyance, embarrassment, or oppression, or undue burden and
expense], 2031.060 [when requests for production of documents have been propounded, any party may
promptly move for a protective order protect the party from unwarranted annoyance, embarrassment, or
oppression, or undue burden and expense], 2033.080, subds. (a)-(b) [when requests for admission have been
propounded, any party may promptly move for a protective order protect the party from unwarranted
annoyance, embarrassment, or oppression, or undue burden and expense].)
These statutes provide that Court may issue the requested order upon a showing of good cause. (See Code
Civ. Proc., 2019.020, subd. (b), 2025.420, subds. (a)-(b), 2030.090, subds. (a)-(b), 2033.080, subds. (a)-(b).)
The Court now turns to the question of whether good cause exists for the sought-after protective order.
In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act , before
commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the
trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5
of the Civil Code. (Code Civ. Proc., 2019.210.) A plaintiff alleging misappropriation of a trade secret should
describe the subject matter of the trade secret with sufficient particularity to separate it from matters of
general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to
permit the defendant to ascertain at least the boundaries within which the secret lies. (Diodes, Inc. v.
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Franzen (1968) 260 Cal.App.2d 244, 253.)
[S]ection 2019.210 serves four interrelated goals: First, it promotes well-investigated claims and dissuades
the filing of meritless trade secret complaints. Second, it prevents plaintiffs from using the discovery process
as a means to obtain the defendant s trade secrets. [Citations.] Third, the rule assists the court in framing the
appropriate scope of discovery and in determining whether plaintiff s discovery requests fall within that
scope. [Citations.] Fourth, it enables defendants to form complete and well-reasoned defenses, ensuring that
they need not wait until the eve of trial to effectively defend against charges of trade secret
misappropriation. [Citation.] [Citation.] (Brescia, supra, 172 Cal.App.4th at p. 144.)
Reasonable particularity mandated by section 2019.210 does not mean that the party alleging
misappropriation has to define every minute detail of its claimed trade secret at the outset of the litigation.
Nor does it require a discovery referee or trial court to conduct a miniature trial on the merits of a
misappropriation claim before discovery may commence. Rather, it means that the plaintiff must make some
showing that is reasonable, i.e., fair, proper, just and rational [citation], under all of the circumstances to
identify its alleged trade secret in a manner that will allow the trial court to control the scope of subsequent
discovery, protect all parties proprietary information, and allow them a fair opportunity to prepare and
present their best case or defense at a trial on the merits. [Citations.]
(Advanced Modular, supra, 132 Cal.App.4th at p. 835.)
Trade secret means information, including a formula, pattern, compilation, program, device, method,
technique, or process, that: [ ] (1) Derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain economic value from its disclosure or use;
and [] (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Cal.
Civ.Code, 3426.1, subd. (d).)
Here, SunPower s trade secret designation does not identify the alleged trade secrets with reasonable
particularity. For instance, SunPower states that its trade secrets are the approximately 1,700 files listed in
Exhibit 1, the 61 emails authored by Cole Peyton, and any information derived, modified, or copied
therefrom. (Kao Dec., 3, Ex. 1, italics added.) This broad, catch-all language renders the trade secret
designation vague and virtually boundless. (See Perlan Therapeutics, Inc. v. Superior Court (2009) 178
Cal.App.4th 1333, 1345, fn. 10 [ Perlan s eight purported trade secrets are: (1) the Charles Invention, (2)
Perlan s Protein Multimerization Process, (3) Perlan s novel idea [involving sialidase to] create a drug to
combat the flu, and (4) all related research, (5) development, (6) advancements, (7) improvements and (8)
processes related thereto. Obviously, the final five categories lack any reasonable particularity . ] & 1350 [
Perlan is not entitled to include broad, catch-all language as a tactic to preserve an unrestricted, unilateral
right to subsequently amend its trade secret statement. ]; see also
E. & J. Gallo Winery v. Instituut Voor Landbouw-En Visserijonderzoek (E.D. Cal., June 19, 2018, No.
117CVOO808DADEPG) 2018 WL 3062160, at *5 (E. &J.) [the use of catch-all descriptions has been rejected
as so vague and unspecific as to constitute no disclosure at all since Defendants cannot ascertain at least the
boundaries of the alleged trade secrets ].)
Furthermore, the description of SunPower s first identified trade secret is confusing and does not clearly
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identify the claimed trade secret. SunPower not only states that each file listed in Exhibit 1 is, itself, a trade
secret compilation, but that specific files contain confidential, proprietary, and trade secret information and
the approximately 1,700 files, as a whole, constitute a complete library of SunPower proprietary and
confidential information, including a compilation of SunPower s most valuable trade secrets. (Kao Dec., 3,
Ex. 1.) Thus, it is unclear if SunPower is claiming that each file constitutes a trade secret compilation, the files,
when taken as a whole, constitute a trade secret compilation, and/or specific files contain trade secret
information.
Moreover, to the extent SunPower asserts that the files contain trade secret information, it fails to point to
the portion of the documents containing the trade secret information or describe the specific trade secret
information contained in the documents. (See Loop Al Labs Inc. v. Gatti (N.D. Cal. 2016) 195 F.Supp.3d 1107,
1116 [indicating that if a plaintiff references a document as setting forth one or more trade secrets, the
plaintiff must specify precisely which portions of the document describes the trade secret]; see also E. & J.,
supra, 2018 WL 3062160, at *5 [ references to unarticulated trade secret information were failed to clearly
articulate the alleged trade secrets ].)
Accordingly, Standard and GAF Energy s motion is GRANTED to the extent it seeks to stay discovery in this
action with respect to the claim for trade secret misappropriation until SunPower has served an adequate
trade secret disclosure under Code of Civil Procedure section 2019.210. SunPower shall serve Defendants
with an amended trade secret disclosure within 30 days of the date of the filing of this order on this matter.
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