Motion to Continue Trial in NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL| Trellis.Law

On November 26, 2019 a Motion-Secondary was filed involving a dispute between Runyon, Nathan Peter, and Does 1-50, Inclusive, Ng, Kaiser, Payward, Inc., A California Corporation, for civil in the District Court of San Francisco County.

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1 Kimberly Pallen (SBN 288605)
kimberly.pallen@withersworldwide.com
2 Christopher N. LaVigne (NYBN 4811121) ELECTRONICALLY
(admitted Pro Hac Vice)
3 christopher.lavigne@withersworldwide.com FILED
Superior Court of California,
Withers Bergman LLP County of San Francisco
4 505 Sansome Street, 2nd Floor
San Francisco, California 94111 03/22/2021
Clerk of the Court
5 Telephone: 415.872.3200 BY: EDNALEEN ALEGRE
Facsimile: 415.549 2480 Deputy Clerk
6
Attorneys for Defendants Payward, Inc., a
7 California Corporation d/b/a Kraken; and Kaiser
NG, an individual
8

9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SAN FRANCISCO
11

12 NATHAN PETER RUNYON, an individual, Case No. CGC-19-581099
13 Plaintiff, DECLARATION OF KIMBERLY A.
PALLEN IN SUPPORT OF EX PARTE
14 v. APPLICATION TO CONTINUE TRIAL
15 PAYWARD, INC., a California Corporation Filed Concurrently with Ex Parte Application
d/b/a KRAKEN; and Kaiser NG, an to Continue Trial and Stipulated Proposed
16 individual; and DOES 1 through 10, inclusive, Order to Continue Trial
17 Defendants. Date: March 23, 2021
Time: 11:00 a.m.
18
The Hon. Samuel K. Feng, Dept. 206
19
Action Filed: November 26, 2019
20 Trial Date: July 12, 2021

22 I, KIMBERLY A. PALLEN, declare as follows:

23 1. The facts stated in this declaration are based on my personal knowledge, and, if called

24 to testify, I could and would competently testify to them. I submit this declaration pursuant to

25 California Rules of Court, Rule 3.1202(c) as Payward’s showing of statutory basis for granting relief

26 ex parte, and Rule 3.1204 as evidence of the notice provided by Payward of the ex parte application.

27 2. I am an attorney duly licensed to practice law in the State of California. I am an

28 attorney at the law firm of Withers Bergman LLP, counsel for plaintiff Payward, Inc. (“Payward”

W ITHERS
NY28571/0001-US-9056714/4
B ERGMAN LLP
DECLARATION OF KIMBERLY A. PALLEN IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE TRIAL DATE
1 or “Plaintiff”) in the above-entitled matter.

2 3. Payward issued document requests to plaintiff Nathan Peter Runyon (“Runyon” or

3 “Plaintiff”) over a year ago. Runyon’s counsel recently informed Payward that they are in

4 possession of two flash drives onto which Runyon downloaded Payward’s internal documents prior

5 to his termination. Runyon’s counsel has stated that these documents are responsive to Payward’s

6 document requests, but has yet to turn them over.

7 4. Payward was unable to review these documents or certain of Plaintiff's medical

8 records, neither of which had been produced, prior to Plaintiff's initial deposition.

9 5. On March 12, 2021, Plaintiff moved to continue the trial date, stating in part that

10 Payward should have the benefit of reviewing the documents on the flash drives prior to making a

11 motion for summary judgment. Attached hereto as Exhibit 1 is a true and correct copy of Plaintiff’s

12 Mem. Of Points and Authorities in support of Plaintiff’s Ex Parte Application for Notice of Motion

13 to Continue Trial Date and Pre-Trial Deadlines, at 1:22-3:3.

14 6. At that time, Payward opposed Plaintiff's attempt to continue the trial date as

15 premature, because Payward intended to compel immediate production of these documents and, if

16 successful, would still be able to meet its summary judgment deadline. Attached hereto as Exhibit

17 2 is a true and correct copy of Payward’s Opposition to Ex Parte Application to Continue Trial or

18 for an Order Shortening Time for Plaintiff Nathan Peter Runyon’s Notice of Motion to Continue

19 Trial, dated March 12, 2021.

20 7. Plaintiff moved ex parte on March 15, 2021, in Department 302, to appoint a special

21 master under CCP § 845 to review the flash drives and the documents on them. Judge Schulman

22 denied this motion and ordered Plaintiff to produce the documents. To date, Plaintiff has not turned

23 over these documents, and has insisted that Payward sign a stipulation regarding those documents

24 before producing them, which is a pre-condition specifically rejected by Judge Schulman.

25 8. Payward attempted to schedule the deposition of a main witness in this case (referred

26 to as "Employee 5" in Plaintiff's operative Complaint) with plenty of time to meet its summary

27 judgment deadline, but settled on March 19, 2021, to accommodate this witness's schedule. The

28 March 19 date was suggested by the witness as a date she would be available for deposition. Two

W ITHERS
NY28571/0001-US-9056714/4 2
B ERGMAN LLP
DECLARATION OF KIMBERLY A. PALLEN IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE TRIAL DATE
1 days prior to the deposition, which had been set for some time, the witness disclosed through her

2 attorney that she had an "immovable" conflict that prevented her from appearing at her March 19

3 deposition and is only available on March 26, a day after Payward's summary judgment deadline.

4 9. On January 29, 2021, Payward issued a Notice of Deposition to Plaintiff. The notice

5 required that he sit for his deposition on March 4, 2021. One day before his deposition, on March

6 3, 2021, Plaintiff’s counsel advised that Plaintiff possesses two USB flash drives that were created

7 by Plaintiff and onto which Plaintiff downloaded Payward documents. Plaintiff’s counsel claimed

8 that she could not produce these documents without first securing a court-ordered special master to

9 “make sure [they] are compliant with ESI collection and management.”

10 10. On March 15, 2021, Payward demanded production of the documents, but thus far

11 Plaintiff has refused to produce them absent a stipulation signed by Plaintiff. Because Payward has

12 yet to review these documents, and because it did not have the benefit of reviewing certain of

13 Plaintiff’s medical records prior to Plaintiff’s initial deposition, Plaintiff must be re-deposed.

14 11. On March 22, 2021, at 9:26 a.m., I provided ex parte notice to Claire Cochran,

15 Natalie Xifo and Maya Sorensen, attorneys of record for Plaintiff. Specifically, I provided notice

16 that on March 23, 2021 at 11:00 a.m. in Department 206 of the San Francisco Superior Courthouse

17 located at 400 McAllister Street, California, defendant Payward, Inc. and Kaiser Ng will be

18 appearing via CourtCall requesting an order continuing the trial date from July 12, 2021 to

19 September 13, 2021 per the stipulation signed by the parties on Friday, March 19, 2021, in the

20 above-referenced case. Attached hereto as Exhibit 3 is a true and correct copy of my e-mail

21 providing ex parte notice.

22 I declare under penalty of perjury under the laws of the State of California that the foregoing

23 is true and correct, except as to matters stated on information and belief and as to those matters, I

24 believe them to be true.

W ITHERS
NY28571/0001-US-9056714/4 3
B ERGMAN LLP
DECLARATION OF KIMBERLY A. PALLEN IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE TRIAL DATE
1 Executed this 22nd day of March, 2021 at San Francisco, California.

3
Kimberly Pallen
4 Attorneys for Plaintiff Payward, Inc. and
Kaiser Ng
5

W ITHERS
NY28571/0001-US-9056714/4 4
B ERGMAN LLP
DECLARATION OF KIMBERLY A. PALLEN IN SUPPORT OF EX PARTE APPLICATION TO CONTINUE TRIAL DATE
EXHIBIT 1
1 Claire E. Cochran (SBN 222529)
Natalie A. Xifo (SBN 280930)
2
LAW OFFICES OF CLAIRE COCHRAN, P.C.
3 100 Pine Street, Suite 1250
San Francisco, CA 94111
4 Telephone: (415) 580-6019
Facsimile: (415) 745-3301
5

6 Attorneys for Plaintiff
NATHAN PETER RUNYON
7

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

9 FOR THE COUNTY OF SAN FRANCISCO

10 [UNLIMITED JURISDICTION]

11 Case No. CGC-19-581099
NATHAN PETER RUNYON
12 EX PARTE APPLICATION FOR
Plaintiff, PLAINTIFF’S NOTICE OF MOTION
13 AND MOTION TO CONTINUE TRIAL
v. AND ALL PRETRIAL DATES AND
14 DEADLINES OR IN THE
ALTERNATIVE AN ORDER
15 PAYWARD, INC., a California Corporation SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION
d/b/a KRAKEN; and KAISER NG an individual TO CONTINUE THE TRIAL
16
and DOES 1-50, inclusive
17 [Filed Concurrently with Memorandum of
Points and Authorities; Declaration of Claire
Defendants. E. Cochran, Esq. and Proposed Order]
18

19 Ex Parte Hearing Date: March 12, 2021
Time: 11:00 a.m.
20 Dept.: 206

21 Date Action Filed: November 26, 2019
Trial Date: July 12, 2021
22

25 ///
26 ///
27 Page | 1
EX PARTE APPLICATION FOR PLAINTIFF’S NOTICE OF MOTION AND MOTION TO
28 CONTINUE TRIAL AND ALL PRETRIAL DATES AND DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION
AND MOTION TO CONTINUE THE TRIAL
1 TO DEFENDANTS AND THEIR ATTORNEYS OF RECORD:

2 NOTICE IS HEREBY GIVEN THAT on March 12, 2021, at 11:00 a.m. or as soon as thereafter

3 as the matter may heard in Department 206 of the San Francisco Superior Court located at 400

4 McAllister Street, San Francisco, CA, Plaintiff NATHAN PETER RUNYON (“Plaintiff”), by

5 and through his attorneys of record, hereby respectfully moves on an ex parte basis for an Order

6 continuing the trial date hereto currently set for July 12, 2021 or in the alternative an Order

7 Shortening Time on Plaintiff’s Notice of Motion and Motion to Continue Trial and all Pretrial

8 Dates and Deadlines to one of the following dates:
9 August 23, 2021
10 August 30, 2021
11 September 13, 2021
12 September 20, 2021
13 Plaintiff also respectfully requests that the Court set all discovery and motions deadlines
14 calculated from the date of trial for the same period of time as the continuance that is granted by
15 the Court.
16 This relief is sought pursuant to California Rules of Court, Rule 3.1332 and San
17 Francisco Superior Court Local Rules of Court, Rule 6.0(B). Good cause exists for the
18 continuance of trial because of the need to have a Special Master examine documents in

19 Plaintiff’s possession and complete his / her work; and, in turn, for the parties to consider and

20 address, if necessary, the findings of the Special Master before Defendants’ deadline to file their

21 Motion for Summary Judgment due on or around March 23, 2021.

22 As more fully set out in the accompanying Declaration of Claire E. Cochran, she

23 attempted in good faith to gain the agreement of Defendants’ counsel to this request for a brief

24 continuance, but he declined to so agree.

27 Page | 1
EX PARTE APPLICATION FOR PLAINTIFF’S NOTICE OF MOTION AND MOTION TO
28 CONTINUE TRIAL AND ALL PRETRIAL DATES AND DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION
AND MOTION TO CONTINUE THE TRIAL
1 Plaintiff’s Notice of Motion to Continue the trial and corresponding pretrial deadlines is

2 based upon this Notice, the Memorandum of Points and Authorities and the Declaration of Claire

3 Cochran, Esq. and exhibits thereto.

4 Notice of this Application was given in compliance with Rule 3.1203 of the California

5 Rules of Court.

7 Dated: March 9, 2021 LAW OFFICES OF CLAIRE COCHRAN PC
8
9 ____________________________
CLAIRE E. COCHRAN
10
Attorneys for Plaintiff,
11 NATHAN PETER RUNYON

2 I. STATEMENT OF FACTS

3 This matter was filed on November 26, 2019. Plaintiff filed a First Amended Complaint

4 (“FAC”) on January 6, 2020. Plaintiff alleges that his former employer, Defendants Payward

5 and Kaiser Ng, discriminated against him based on his disability, and that Defendants retaliated

6 against him for raising concerns about their misconduct in altering employees’ equity vesting

7 schedules.

8 The Defendants filed a Notice of Demurrer and Motion to Strike Plaintiff’s FAC

9 (“Defendants’ Motions”). The hearing on Defendants’ Motions was held on March 11, 2020. The

10 Court overruled Defendants’ request to demurrer Plaintiff’s FEHA causes of action, fifth, eighth,

11 ninth and tenth causes of action. The Court denied Defendant’s Motion to Strike Irrelevant, False

12 or Improper Matters in Plaintiff’s FAC in its entirety.
This Court vacated the Case Management Conference scheduled for April 16, 2020. On
13
May 20, 2020, the Court then issued a Notice of Time and Place of Trial setting the case for trial
14
on January 25, 2021 (“Notice of Trial”).
15
On August 20, 2020, the Court granted Plaintiff’s request to continue the trial. That
16
Motion was necessary in order to address the fact that Defendants had not produced documents
17
after their lead counsel changed firms, including the fact that Plaintiff’s counsel was unable to
18
obtain childcare at the start of the pandemic. As a result of issues related to the inability of the
19
parties to agree on how to conduct discovery as a result of the pandemic a trial continuance was
20
sought. Defendants were not opposed to the continuance of trial but sought a stay of the
21
proceedings until November 2020. The Court denied Defendant’s request for a stay.
22
Plaintiff’s request for a trial continuance is made necessary to address a pressing
23
discovery issue before Defendants’ deadline to file a Motion for Summary of Judgment which is
24
due March 23, 2021. This request is being made in order to allow for the orderly and well-
25
considered resolution of a pressing discovery issue. Plaintiff’s counsel has in their possession
26 electronically-stored documents that Plaintiff provided on a USB flash drive, which substantiate
27
Page | 1
28 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S EX PARTE
APPLICATION FOR NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL
DEADLINES OR IN THE ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION TO CONTINUE THE TRIAL
1 that Defendants altered employees’ equity vesting schedule without consent of the Payward’s

2 Board of Directors. The documents that Plaintiff obtained were prior to Payward terminating

3 him. The information is contained on two USB flash drives that Plaintiff created while he was

4 employed by Payward.

5 Counsel for Defendant, Christopher LaVigne, recently advised Plaintiff’s counsel that

6 Payward, dba Kraken, will be pursuing Plaintiff’s communications protected by the work-

7 product doctrine and attorney-client privilege under the crime fraud exception to the attorney-
client privilege, and any related case, as they relate to documents provided by Plaintiff. In light
8
of this assertion, and to make sure Plaintiff’s counsel is compliant with ESI collection and
9
management, Plaintiff’s counsel explained to Defendants’ counsel that the document production
10
must be conducted by an expert via a forensic analysis and any related data and documents were
11
to be produced by the expert to both sides. Plaintiff’s counsel proposed the parties stipulate to a
12
joint expert to expedite the process. Defendants’ counsel declined the offer and instead ignored
13
the protocol and demanded the production of the USB flash drives.
14
In order to have the forensic analysis conducted, Plaintiff’s counsel needs to have an
15
expert to create a forensic image of the two USB flash drives that Plaintiff created. No expert
16
will do so absent an order from the Court or a stipulation from both parties that the confidential
17
data can be examined. This forensic road map is an essential first step before Plaintiff’s counsel
18
can produce the USB flash drives for inspection (and confidential production) to counsel for
19
Defendants. Plaintiff’s counsel was advised of this requirement just 24 hours prior to inquiring of
20
Defendants’ counsel whether they would stipulate to the appointment of a Special Master and to
21 continue the existing trial date.
22 Defendants’ deadline to file their Motion for Summary Judgment (“MSJ”) is March 23,
23 2021. The USB flash drives and the documents therein need to be reviewed, analyzed and
24 produced before the Defendants file their MSJ. This process cannot occur in the next two weeks
25 and as such the trial needs to be continued along with all pretrial and discovery deadlines. The
26 USB flash drives and documents saved on the drives are an essential part of Plaintiff’s case and
27
Page | 1
28 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S EX PARTE
APPLICATION FOR NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL
DEADLINES OR IN THE ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION TO CONTINUE THE TRIAL
1 substantiate his claims under Labor Code section 1102.5. These USB drives and confidential

2 relevant documents must be produced to a Special Master to review before Defendants file their

3 MSJ.

4 Plaintiff expects that the same forensic analysis designated will be applied to sources or

5 confidential documents produced by Defendants in this case, especially when a confidential

6 document has been or will be produced that conflicts with the versions on the USB flash drives.

7 A proper analysis and consideration of the documents has implications beyond this civil
action. Four days after they filed their Answer in this civil action, Defendants filed a civil action
8
against Mr. Runyon in the United States District Court for the Northern District of California –
9
reciting the identical arguments they cited in their Notice of Demurrer and Motion to Strike
10
Plaintiff’s FAC. After their first Complaint in that action was dismissed on Mr. Runyon’s
11
motion, Payward filed an Amended Complaint. In their Amended Complaint, Payward set out
12
three causes of action: (1) violation of the Defendant Trade Secrets Act (“DTSA”), 18 U.S.C. §§
13
1831-39, based on an allegation that Mr. Runyon retained his company-issued laptop, copied
14
documents that contained trade secrets, and disclosed or used the trade secrets contained in those
15
documents; (2) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030,
16
based on an allegation that Mr. Runyon failed to return his laptop when he was terminated; and
17
(3) breach of contract, under California State law, for allegedly failing to return his laptop. Mr.
18
Runyon filed a new motion to dismiss; the Court granted the motion as to the first claim for relief
19
and denied the motion as to the other two claims for relief. Accordingly, that federal action,
20
which thus implicates the contents of the USB flash drives at issue here, remains pending.
21 In light of all of this, it is clear that the appointment of a digital forensics Special Master
22 is necessary to proper evaluation of the contents of the thumb drives at issue here. In particular,
23 it is clear that it is essential to a proper resolution of this action for a neutral third party to
24 examine the contents of Plaintiff’s flash drive, including when this information was obtained –
25 so that Defendants do not further retaliate against Plaintiff and his attorneys with baseless
26 lawsuits alleging that Plaintiff stole their trade secrets after being terminated. Moreover, these
27
Page | 1
28 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S EX PARTE
APPLICATION FOR NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL
DEADLINES OR IN THE ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION TO CONTINUE THE TRIAL
1 confidential documents are essential to Plaintiff’s case and substantiating his claims of retaliation

2 for whistleblowing.

3 On March 4, 2021, once it was clear that Defendants’ counsel would not stipulate to the
4 request, Plaintiff, through counsel, filed a Motion to Appoint a Special Master pursuant to
5 California Code of Civil Procedure § 845. In particular, in Plaintiff’s supporting Memorandum,
6 Plaintiff argued that a Special Master appointed by the court has the technical expertise to
7 understand eDiscovery issues and settle disputes efficiently. Plaintiff proposed a scope of duty
8 that would allow the Special Master to conduct discovery, take evidence and argument, and
9 review the existing record in making recommended findings of fact, conclusions of law, or terms
10 of final judgment in his or her report. Plaintiff also argued that this scope of duty would allow
11 the Special Master to carefully examine the complex legal and factual issues presented by the
12 case. If appointed, a Special Master may take evidence and recommend findings of fact and
13 conclusions of law regarding the contents of the thumb drives.
14 All of this will take some time but, in reality, not a period that would be sufficient to
15 prejudice either party. Accordingly, as more specifically set out below in the Declaration of
16 Claire E. Cochran, Esquire, Plaintiff’s counsel asked Defendants’ counsel if he would stipulate to
17 this request to continue. In particular, Plaintiff’s counsel stated that the continuance would allow
18 the Special Master to conduct his or her work and for both parties to deal with and address any
19 findings of the Special Master. Defendants, without reason, refused. As a consequence, Plaintiff

20 has been forced to bring the instant Motion to Continue the Trial and all discovery and pretrial

21 deadlines.

22 II. ARGUMENT

23 A. Good Cause Exists to Continue the Trial

24 A court may grant a continuance before or during trial on an affirmative showing of

25 good cause. Cal. R. Ct. Rule 3.1332 (c)(3), (6) and (7). In addition, good cause may be

26 demonstrated when, as here, there will be no prejudice to the parties or witnesses to delay. Id.

27 (d)(2) and (5). Here, it is clear that good cause exists to continue the trial, for approximately six
Page | 1
28 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S EX PARTE
APPLICATION FOR NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL
DEADLINES OR IN THE ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION TO CONTINUE THE TRIAL
1 to eight weeks, so that the Special Master will be able to complete his / her work and the parties,

2 in turn, will be able to deal with and, if necessary, address the findings of the Special Master. In

3 these circumstances, Defendants cannot legitimately support a contention that they would be

4 prejudiced by a continuance of the trial in this matter.

5 B. Continuance Sought as Soon as Reasonably Practical
6 A party seeking a continuance of the date set for trial, whether contested or uncontested
7 or stipulated to by the parties, must make the motion or application as soon as reasonably
8 practical once the necessity for the continuance is discovered. Cal. R. Ct. Rule 3.1332(b). Here,
9 as soon as Plaintiff’s counsel learned that Defendants’ counsel would not agree to appointment
10 of a Special Master and also not agree to a continuance so that the Special Master could
11 complete his / her work, Plaintiff pursued the instant Motion.
12 III. CONCLUSION
13 For all of the reasons stated above, and pursuant to the authorities cited herein, Plaintiff
14 respectfully requests the Court continue the trial dates and pre-trial deadlines, including
15 discovery deadlines and motion practice in this matter to ______________ ___, 2021.
16

17
Dated: March 9, 2021 LAW OFFICES OF CLAIRE COCHRAN PC
18

19 ____________________________
20 CLAIRE E. COCHRAN
Attorneys for Plaintiff,
21 NATHAN PETER RUNYON

27
Page | 1
28 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S EX PARTE
APPLICATION FOR NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL
DEADLINES OR IN THE ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S
NOTICE OF MOTION AND MOTION TO CONTINUE THE TRIAL
1
DECLARATION OF CLAIRE E. COCHRAN
2
I, CLAIRE E. COCHRAN, ESQ., declare as follows:
3
1. I am an attorney licensed to practice law in the State of California. I am the
4
Owner and Principal of the law firm Law Offices of Claire Cochran, P.C. (“LOCC”), attorneys
5
of record for Plaintiff NATHAN PETER RUNYON (“Plaintiff”) in the within civil proceeding.
6
If called upon as a witness, I could and would competently testify to the following:
7
2. This declaration is in support of Plaintiffs’ Motion for Continuance of the Trial
8
Dates and Pre-Trial Deadlines.
9
3. This matter was filed November 26, 2019. Plaintiff filed a First Amended
10
Complaint (“FAC”) on January 6, 2020. By February 2020, the Defendants filed a Notice of
11
Demurrer and Motion to Strike Plaintiff’s FAC (“Defendants’ Motions”). The hearing on
12
Defendants’ Motions was held on March 11, 2020. The Court overruled Defendants’ request to
13
demurrer Plaintiff’s FEHA causes of action, fifth, eighth, ninth and tenth causes of action. The
14
Court denied Defendant’s Motion to Strike Irrelevant, False or Improper Matters in Plaintiff’s
15
FAC in its entirety.
16
4. This Court vacated the Case Management Conference scheduled for April 16,
17
2020. On May 20, 2020, the court issued a Notice of Time and Place of Trial setting the case for
18
trial on January 25, 2021 (“Notice of Trial”).
19
5. On August 20, 2020, the Court granted Plaintiff’s request to continue the trial.
20
That Motion was necessary in order to address the fact that Defendants had not produced
21
documents after their lead counsel changed firms, including the fact that Plaintiff’s counsel was
22
unable to obtain childcare at the start of the pandemic. As a result of issues related to the
23
inability of the parties to agree on how to conduct discovery as a result of the pandemic a trial
24
continuance was sought. Defendants were not opposed to the continuance of trial but sought a
25
stay of the proceedings until November 2020. The Court denied Defendant’s request for a stay.
26
6. The request for a trial continuance is made necessary to address a pressing
27
Page | 1
28
DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S EX PARTE APPLICATION FOR
NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION AND
MOTION TO CONTINUE THE TRIAL
1 discovery issue before Defendants’ deadline to file a Motion for Summary of Judgment which is

2 due March 23, 2021. This request is being made in order to allow for the orderly and well-

3 considered resolution of a pressing discovery issue. LOCC has in their possession

4 electronically-stored documents that Plaintiff provided on a USB flash drive, which substantiate

5 that Defendants altered employees’ equity vesting schedule without consent of the Payward’s

6 Board of Directors. The documents that Plaintiff obtained were prior to Payward terminating

7 him. The information is contained on two USB flash drives that Plaintiff created while he was

8 employed by Payward.
9 7. Counsel for Defendant, Christopher LaVigne, recently advised me that Payward,
10 dba Kraken, will be pursuing Plaintiff’s communications protected by the work-product
11 doctrine and attorney-client privilege under the crime fraud exception to the attorney-client
12 privilege, and any related case, as they relate to documents provided by Plaintiff. In light of this
13 assertion, and to make sure Plaintiff’s counsel is compliant with ESI collection and
14 management, Plaintiff’s counsel explained to Defendants’ counsel that the document production
15 must be conducted by an expert via a forensic analysis and any related data and documents were
16 to be produced by the expert to both sides. Plaintiff’s counsel proposed the parties stipulate to a
17 joint expert to expedite the process. Defendants’ counsel declined the offer and instead ignored
18 the protocol and demanded the production of the USB flash drives.

19 8. In order to have the forensic analysis conducted, we need to have an expert

20 create an image of the USB flash drives that Plaintiff created and no expert will do so absent an

21 Order from this Honorable Court or a stipulation from both parties that the confidential data can

22 be examined. This forensic road map is an essential first step before Plaintiff’s counsel can

23 produce the USB flash drives for inspection (and confidential production) to counsel for

24 Defendants. I was advised of this ESI requirement just 24 hours prior to inquiring of

25 Defendants’ counsel whether they would stipulate to the appointment of a Special Master and to

26 continue the existing trial date.

27 9. The immediate need to continue the trial date and all discovery and pretrial
Page | 1
28
DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S EX PARTE APPLICATION FOR
NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION AND
MOTION TO CONTINUE THE TRIAL
1 deadlines is due to the March 23, 2021deadline for Defendants to file their Motion for Summary

2 Judgment. As such, these documents and the USB flash drives must be analyzed, reviewed and

3 produced as soon as possible. As it is unlikely that an expert can do this work within the next

4 two weeks, Plaintiff is simultaneously filing a motion to continue the trial.

5 10. Plaintiff expects that the same forensic analysis designated will be applied to

6 sources or confidential documents produced by Defendants in this case, especially when a

7 confidential document has been or will be produced that conflicts with the versions on our

8 client’s USB flash drives.
9 11. A proper analysis and consideration of the documents also has implications
10 beyond this civil action. Four days after they filed their Answer in this civil action, Defendants
11 filed a civil action against Mr. Runyon in the United States District Court for the Northern
12 District of California – reciting the identical arguments they cited in their Notice of Demurrer
13 and Motion to Strike Plaintiff’s FAC. In their federal action, Case No. 3:20-cv-02130-MMC,
14 Defendants stated causes of action for Misappropriation of Trade Secrets, Unlawfully Accessing
15 a Protected Computer under Computer Fraud and Abuse Act and Breach of Contract. Mr.
16 Runyon filed a motion to dismiss; the District Court granted Mr. Runyon’s motion; and the
17 Defendants filed an Amended Complaint. In their Amended Complaint, Payward set out three
18 causes of action: (1) violation of the Defendant Trade Secrets Act (“DTSA”), 18 U.S.C. §§

19 1831-39, based on an allegation that Mr. Runyon retained his company-issued laptop, copied

20 documents that contained trade secrets, and disclosed or used the trade secrets contained in

21 those documents; (2) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §

22 1030, based on an allegation that Mr. Runyon failed to return his laptop when he was

23 terminated; and (3) breach of contract, under California State law, for allegedly failing to return

24 his laptop. A true and correct copy of Payward’s Amended Complaint filed in United States

25 District Court for the Northern District of California is attached as Exhibit “A.” Mr. Runyon

26 filed a new motion to dismiss; the Court granted the motion as to the first claim for relief and

27 denied the motion as to the other two claims for relief. A true and correct copy of the District
Page | 1
28
DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S EX PARTE APPLICATION FOR
NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION AND
MOTION TO CONTINUE THE TRIAL
1 Court’s ruling on Mr. Runyon’s motion to dismiss is attached as Exhibit “B.” Accordingly, that

2 federal action, which thus implicates the contents of the thumb drives at issue here, remains

3 pending.

4 12. Because Mr. LaVigne will not stipulate to our request to appoint a Special

5 Master, we are also filing, simultaneously with this Application, a Motion to Appoint a Special

6 Master pursuant to California Code of Civil Procedure § 845. In particular, in our supporting

7 Memorandum, we argued that a Special Master appointed by the court has the technical

8 expertise to understand eDiscovery issues and settle disputes efficiently. We also proposed a
9 scope of duty that would allow the Special Master to conduct discovery, take evidence and
10 argument, and review the existing record in making recommended findings of fact, conclusions
11 of law, or terms of final judgment in his or her report. We also argued that this scope of duty
12 would allow the Special Master to carefully examine the complex legal and factual issues
13 presented by the case. If appointed, a Special Master may take evidence and recommend
14 findings of fact and conclusions of law regarding the contents of the USB flash drives.
15 Efforts to Meet and Confer and Stipulate to the Continuation of the Trial Date

16 13. All of this will take some time but, in reality, not a period that would be

17 sufficient to prejudice either party. Accordingly, to allow for the Special Master to conduct his

18 or her work and for both parties to deal with and address any findings of the Special Master, as

19 more specifically set out below, I sought a stipulation for this request to continue the trial for

20 approximately six to eight weeks. Defendants, without reason, refused.

21 14. On March 3, 2021, I sent a letter via email to Defendants’ counsel, Christopher

22 LaVigne. 1 I advised Mr. LaVigne of the facts set out above concerning our inability to produce

23 the flash drives until a forensic analysis had been conducted. I proposed to Mr. LaVigne that

24 the parties jointly retain an expert who could conduct an analysis of the USB flash drives and

25 map any related usage of the jump drives, and their confidential documents, immediately. I

26
1
This correspondence was designated as highly confidential and protected pursuant to Stipulated Protective Order, as
27 such it cannot be attached as an exhibit herein.

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28
DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S EX PARTE APPLICATION FOR
NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION AND
MOTION TO CONTINUE THE TRIAL
1 also suggested that we offer up related experts as quickly as possible and get these examined,

2 mapped and provided to both parties for use in his deposition of Plaintiff and before

3 Defendants’ deadline to file a Motion for Summary Judgment.

4 15. I also explained that, whatever happens, it is essential that Plaintiff be allowed to

5 conduct this forensic review of the flash drives to defend against claims of wrongful acts,

6 levied against both Plaintiff and his Counsel and to substantiate his claims of retaliation for

7 whistleblowing pursuant to Labor Code section 1102.5. I also made clear that any forensic

8 review would be provided to Defendants.
9 16. On March 3, 2021, Mr. LaVigne sent an email to me in which he declined to
10 agree to the appointment of a Special Master and declined to agree to a brief continuance of the
11 July 12, 2021 trial date. Instead, Mr. LaVigne demanded that my firm send them the USB flash
12 drives absent any forensic evaluation of same. A true and correct copy of the email exchange is
13 attached as Exhibit “C.” As such, a motion to continue the trial and pretrial and discovery
14 deadlines was required to be filed to immediately address this issue.
15 17. Based on the foregoing, it is respectfully requested that this Court continue the
16 trial date and corresponding pre-trial deadlines, including discovery and motions deadlines, as
17 set out more specifically in the instant Motion and accompanying Memorandum.
18 I declare under penalty of perjury under the laws of the State of California that the foregoing is

19 true and correct.

20 Executed on March 9, 2021, at San Francisco California.

23 CLAIRE E. COCHRAN, ESQ
Attorneys for Plaintiff,
24 NATHAN PETER RUNYON
25

27
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28
DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S EX PARTE APPLICATION FOR
NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES OR IN THE
ALTERNATIVE AN ORDER SHORTENING TIME FOR PLAINTIFF’S NOTICE OF MOTION AND
MOTION TO CONTINUE THE TRIAL
Exhibit A
Case 3:20-cv-02130-MMC Document 34 Filed 10/09/20 Page 1 of 27

Kimberly Almazan (SBN 288605)
1
kimberly.almazan@withersworldwide.com
2 Christopher N. LaVigne (NYBN 4811121)
(Admitted Pro Hac Vice)
3 christopher.lavigne@withersworldwide.com
Withers Bergman LLP
4
505 Sansome Street, 2nd Floor
5 San Francisco, California 94111
Telephone: 415.872.3200
6 Facsimile: 415.549 2480
7
Attorneys for Plaintiffs Payward, Inc., a
8 California Corporation d/b/a Kraken

9
UNITED STATES DISTRICT COURT
10
NORTHERN DISTRICT OF CALIFORNIA
11
SAN FRANCISCO/OAKLAND DIVISION
12
13
PAYWARD, INC., a California Corporation, Case No.: 20-cv-2130-MMC
14 d/b/a KRAKEN,
AMENDED COMPLAINT
15
Plaintiff, DEMAND FOR JURY TRIAL
16
v.
17
NATHAN PETER RUNYON., an individual,
18
and DOES 1 through 10, inclusive.
19
Defendant.
20
21
22
23
24
25
26
27
28
PAYWARD v. RUNYON
Case No. 20-CV-2130-MMC NY28571/0002-US-8632109/2
AMENDED COMPLAINT
Case 3:20-cv-02130-MMC Document 34 Filed 10/09/20 Page 2 of 27

1 Plaintiff Payward, Inc. d/b/a Kraken (“Payward” or “the Company”) alleges the following:
2 INTRODUCTION
3 1. Payward is a global cryptocurrency exchange that critically relies on trade secrets
4 and confidential business information to maintain the security of its operations. Because of the
5 nature of its business, Payward is subject to constant physical and electronic hacking attempts,
6 and the security of Payward’s physical business locations, employees, and business and customer
7 data is of the utmost importance to ensure Plaintiff’s successful and continuing business
8 operations.
9 2. This action seeks to hold Defendant Nathan Peter Runyon, a former employee of
10 Payward, accountable for unlawfully accessing and misappropriating Payward’s confidential
11 business information and trade secrets and for violating his confidentiality agreement with
12 Payward.
13 3. Payward employed Defendant as a financial analyst in its San Francisco, CA office
14 from March 26, 2018 until August 1, 2019. Before his employment began, Defendant signed a
15 Confidential Information and Invention Assignment Agreement on March 14, 2018 (the
16 “Confidentiality Agreement”) that bound him to protect and maintain in strict confidence the
17 information and data he became aware of, accessed, and stored through his employment with
18 Payward.
19 4. In connection with his hiring and employment by Payward, Defendant was
20 repeatedly made aware of, and bore witness to, the paramount necessity for confidentiality
21 surrounding Payward’s business. This need for confidentiality in all aspects of Payward’s
22 business includes numerous security measures ranging from, for example, protection of sensitive
23 customer electronic account information to safeguarding the confidentiality of the physical
24 locations and addresses of Payward’s offices.
25 5. In connection with Defendant’s employment, Payward issued Defendant a laptop
26 for use in his day-to-day activities and responsibilities at Payward. During the course of
27 Defendant’s employment at Payward, he accumulated a large amount of financial, business,
28 customer, technical, and economic proprietary information and data in the form of, among other
PAYWARD v. RUNYON
Case No. 20-CV-2130-MMC 1 NY28571/0002-US-8632109/2
AMENDED COMPLAINT
Case 3:20-cv-02130-MMC Document 34 Filed 10/09/20 Page 3 of 27

1 things, documents, emails, and internal Company communications, all of which Defendant stored
2 on his Company-issued laptop.
3 6. Payward terminated Defendant’s employment on August 1, 2019.
4 7. Payward was acutely aware of the sensitive, confidential, and trade-secret
5 information contained on Defendant’s laptop computer. Accordingly, immediately upon
6 Defendant’s termination from the Company, Payward instructed Defendant to return the laptop
7 to Payward. Additionally, Defendant was obligated under the Confidentiality Agreement to return
8 Company property, including the laptop, to Payward immediately upon his termination.
9 8. Despite repeated attempts by Payward to collect the laptop from Defendant, he
10 refused to return the laptop to Payward. Instead, Defendant strung Payward along with false
11 promises to return the laptop while he could continue to access the confidential and trade secret
12 information on the laptop.
13 9. On August 2, 2019, Defendant claimed he could not return the laptop to Payward
14 because he may be going on a vacation. On August 6, 2019, he stated he would keep Payward
15 updated on his return from vacation and when he could return the laptop. Payward followed up
16 with Defendant on August 14, 2019, seeking clarity on when Defendant would return the laptop.
17 Defendant sent a series of emails stating he would return the laptop on successively later dates.
18 10. Eventually, Defendant stated he would return the laptop to Payward on August 29,
19 2019. However, when that date arrived, Defendant

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Document Filed Date

March 22, 2021

Case Filing Date

November 26, 2019

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Parties

CALDERON, ANDREW E. Attorney for the Defendant
COCHRAN, CLAIRE E. Attorney for the Plaintiff
DOES 1-50, INCLUSIVE Defendant
EMPLOYEE 5 Other
FORD, BRENDAN M. Attorney
LAVIGNE, CHRISTOPHER N. Attorney for the Defendant
NG, KAISER Defendant
PAYWARD, INC., A CALIFORNIA CORPORATION Defendant
RUNYON, NATHAN PETER Plaintiff
STEVENS, GREGORY W. Attorney for the Plaintiff
Natalie Xifo Attorneys for Plaintiffs
Kimberly Pallen Attorneys for Defendants
Claire Eberhard Attorney
Howard Strong Attorneys for Plaintiffs
Eduardo Dominguez Attorney
Aaron Minnis Attorney
Christopher Layne Attorney

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Motion-Secondary: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL

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