Preview
1 Claire E. Cochran (SBN 222529)
Natalie A. Xifo (SBN 280930) ELECTRONICALLY
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LAW OFFICES OF CLAIRE COCHRAN, P.C.
100 Pine Street, Suite 1250
F I L E D
3 Superior Court of California,
San Francisco, CA 94111 County of San Francisco
4 Telephone: (415) 580-6019 07/24/2020
Facsimile: (415) 745-3301 Clerk of the Court
5 BY: JUDITH NUNEZ
Deputy Clerk
6 Attorneys for Plaintiff
NATHAN PETER RUNYON
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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 PLAINTIFF NATHAN PETER
Plaintiff, RUNYON’S NOTICE OF MOTION TO
13 CONTINUE TRIAL DATES AND
v. PRETRIAL DEADLINES
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[Filed Concurrently with Memorandum of
15 PAYWARD, INC., a California Corporation Points and Authorities; Declaration of Claire
E. Cochran, Esq. and [Proposed] Order]
d/b/a KRAKEN; and KAISER NG an individual
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and DOES 1-50, inclusive Hearing Date: August 20, 2020
17 Time: 9:30 a.m.
Dept.: 206
Defendants.
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Date Action Filed: November 26, 2019
19 Trial Date: January 25, 2021
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PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 TO DEFENDANTS AND THEIR ATTORNEYS OF RECORD:
2 NOTICE IS HEREBY GIVEN THAT on August 20, 2020, at 9:30 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”) and
5 through his attorneys of record, will and hereby does move for an Order continuing the trial date
6 hereto set for January 25, 2021, all discovery and motion cut-offs dates.
7 The trial is currently set for January 25, 2021. Plaintiff respectfully requests an order
8 continuing the trial dates and pre-trial deadlines, including discovery deadlines and motion
9 practice in this action from January 25, 2021 to
10 • May 3, 10, 17, 24, 2021; or
11 • June 7, 2021; or
12 • July 12, 19, 26, 2021.
13 Plaintiff requests that all discovery deadlines be extended to correspond to the new trial
14 date.
15 This relief is sought pursuant to California Rules of Court, Rule 3.1332 and San
16 Francisco Superior Court Local Rules of Court, Rule 6.0(B), and good cause exists for the
17 continuance of trial because of a plethora of issues, including but not limited to, Shelter in Place
18 Orders and its effects it has had on lead counsel’s ability to obtain any child care, lead counsel’s
19 only associate and second chair on this matter, scheduled to take maternity leave September 1,
20 2020 through February 1, 2021, managing the ongoing the outstanding discovery responses and
21 documents owed by Defendants, and scheduling of depositions for all parties and witnesses
22 during the Shelter in Place Orders. After having engaged in multiple meet and confer
23 discussions, Defendants would only agree to a continuance of the trial in exchange for a
24 complete stay of this matter – including but not limited to all filings, motion practice, discovery
25 and communications about discovery disputes – until November 16, 2020, at which time
26 Defendants would then make its final production of documents. While Plaintiff’s counsel was
27 amenable to an extension of time to allow Defendant’s production to be finalized by November,
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PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 she could not agree to “stay” everything given that Defendant, Payward, filed a related action
2 against Nathan Peter Runyon in Northern District Court.
3 Plaintiff’s Notice of Motion to Continue the trial and corresponding pretrial deadlines is
4 based upon this Notice, the accompanying Declaration of Claire Cochran, Esq. and a
5 Memorandum of Points and Authorities.
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7 Dated: July 23, 2020 LAW OFFICES OF CLAIRE COCHRAN PC
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9 ____________________________
CLAIRE E. COCHRAN
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Attorneys for Plaintiff,
11 NATHAN PETER RUNYON
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PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. BACKGROUND
3 This matter was filed on November 26, 2019. Plaintiff filed a First Amended Complaint
4 (“FAC”) on January 6, 2020. By February 2020, the Defendants filed a Notice of Demurrer and
5 Motion to Strike Plaintiff’s FAC (“Defendants’ Motions”). The hearing on Defendants’ Motions
6 was held on March 11, 2020. The Court overruled Defendants’ request to demurrer Plaintiff’s
7 FEHA causes of action, fifth, eighth, ninth and tenth causes of action. The Court denied
Defendant’s Motion to Strike Irrelevant, False or Improper Matters in Plaintiff’s FAC in its
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entirety.
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On March 23, 2020, Defendants filed their Answer. Four days later Defendants filed a
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related Civil Complaint against Nathan Peter Runyon in the U.S. District Court, Northern
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District reciting the identical arguments they cited in their Notice of Demurrer and Motion to
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Strike Plaintiff’s FAC. In Defendant’s District Court Case NO. 3:20-cv-02130-MMC Complaint
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they alleged the following cause of actions: Misappropriation of Trade Secrets, Unlawfully
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Accessing a Protected Computer under Computer Fraud and Abuse Act and Breach of Contract.
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Defendant, Nathan Peter Runyon, filed a Motion to Dismiss the case and the parties are awaiting
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the Court’s Ruling.
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In this matter the Court vacated the Case Management Conference scheduled for April
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16, 2020. On May 20, 2020, the court issued a Notice of Time and Place of Trial setting the case
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for trial on January 25, 2021 (“Notice of Trial”). There have been no requests to continue trial
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before this Notice of Motion to Continue Trial and Pre-Trial Deadlines.
21 Counsel for the parties have been meeting and conferring about Defendants’ production
22 of documents since March 2020. Plaintiff’s counsel granted three extensions for them to produce
23 after lead counsel, Christopher LaVigne changed law firms. Due to COVID-19 the parties have
24 postponed depositions and currently are in disagreement with Defendant’s counsel who are
25 demanding that Plaintiff and counsel physically appear for depositions in the next few weeks
26 instead of virtual depositions.
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF
MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 Upon receipt of the Court’s Notice of Trial (received in June 2020), Plaintiff’s counsel
2 requested that Defendants agree to a continuance of the trial date given that Natalie A. Xifo, the
3 second chair in the matter, would be on maternity leave throughout the pre-trial deadlines and
4 continuing through trial. Defendants’ counsel would only agree to a continuance in exchange for
5 a complete stay of this matter – including but not limited to all filings, motion practice, discovery
6 and communications about discovery disputes – until November 16, 2020, at which time
7 Defendants would then make its final production of documents. Absent a stay of the case
Defendants refused to agree to continue the trial. As such, Plaintiff was forced to bring the
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instant Motion to Continue Trial and all Pre-Trial Deadlines.
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II. ARGUMENT
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A. Good Cause Exists to Continue the Trial
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A court may grant a continuance before or during trial on an affirmative showing of
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good cause. Cal. R. Ct. Rule 3.1332 (c)(3), (6) and (7). In addition, good cause may be
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demonstrated by the fact there have not been any continuances granted before and there will be
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no prejudice to the parties or witnesses to delay this trial. Id. (d)(2) and (5).
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Here, good cause exists to continue the trial for several reasons (1) lead counsel’s only
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associate at LOCC and her second chair will be on maternity leave beginning September 12,
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2020 through February 1, 2021; (2) due to the ongoing pandemic and the recent orders from the
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California Governor, lead counsel’s children are not physically returning to school in Fall 2020,
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and will be at home for long distance learning, thus creating a significant issue concerning lead
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counsel’s ability to obtain appropriate childcare; (3) with all of the pre-trial deadlines, motion
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practice and discovery cut-off falling during the beginning of her children’s school year with
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both of her young children at home with no childcare in conjunction with her second chair being
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out on maternity leave, lead counsel will be unable to meet these deadlines without enduring
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significant hardship, thus causing her client severe prejudice.
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After the Court canceled the CMC, lead counsel was unable to advise the Court of these
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issues before a trial date was set. No other continuances of the trial dates have been grated
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before in this case. There will be no prejudice to Defendants to delay this trial (as they initially
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF
MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 already agreed to a date at the end of April 2021 or date of the Court’s choosing thereafter)
2 while in comparison Plaintiff will be severely prejudiced if this trial were to proceed on January
3 25, 2021.
B. Continuance Sought as Soon as Reasonably Practical
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A party seeking a continuance of the date set for trial, and all discovery and motion cut-
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offs dates will be based on new trial date whether contested or uncontested or stipulated to by the
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parties, must make the motion or application as soon as reasonably practical once the necessity
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for the continuance is discovered. Cal. R. Ct. Rule 3.1332(b). Here, after receiving the Court’s
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Notice of Trial in June 2020, Plaintiff’s counsel requested that Defendants agree to a continuance
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of the trial. It was not until July 22, 2020 that it was determined that Defendants no longer would
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agree to a continuance absent a “stay” of the case until November 16, 2020, while their case
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against Nathan Peter Runyon in District Court would remain ongoing, allowing them an unfair
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advantage to continue to obtain discovery, set depositions and move forward with aggressive
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motion practice in that venue while Plaintiff’s hands remained tied in Superior Court. As such,
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Plaintiff was forced to file the underlying Motion to Continue the Trial and all Pre-Trial
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Deadlines and seek the Court’s relief.
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III. CONCLUSION
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For all of the reasons stated above, and pursuant to the authorities cited herein, Plaintiff
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respectfully requests the Court continue the trial dates and pre-trial deadlines, including
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discovery deadlines and motion practice in this matter to May 3, 10, 17, 24, 2021; or June 7,
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2021; or July 12, 19, 26, 2021.
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23 Dated: July 23, 2020 LAW OFFICES OF CLAIRE COCHRAN PC
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____________________________
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CLAIRE E. COCHRAN
26 Attorneys for Plaintiff,
NATHAN PETER RUNYON
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF
MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
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DECLARATION OF CLAIRE E. COCHRAN
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I, CLAIRE E. COCHRAN, ESQ., declare as follows:
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1. I am an attorney licensed to practice law in the State of California. I am the
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Owner and Principal of the law firm Law Offices of Claire Cochran, P.C. (“LOCC”), attorneys
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of record for Plaintiff NATHAN PETER RUNYON (“Plaintiff”) in the within civil proceeding.
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If called upon as a witness, I could and would competently testify to the following:
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2. This declaration is in support of Plaintiffs’ Motion for Continuance of the Trial
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Dates and Pre-Trial Deadlines.
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3. This matter was filed November 26, 2019. Plaintiff filed a First Amended
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Complaint (“FAC”) on January 6, 2020. By February 2020, the Defendants filed a Notice of
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Demurrer and Motion to Strike Plaintiff’s FAC (“Defendants’ Motions”). The hearing on
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Defendants’ Motions was held on March 11, 2020. The Court overruled Defendants’ request to
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demurrer Plaintiff’s FEHA causes of action, fifth, eighth, ninth and tenth causes of action. The
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Court denied Defendant’s Motion to Strike Irrelevant, False or Improper Matters in Plaintiff’s
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FAC in its entirety.
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4. On March 23, 2020, Defendants filed their Answer. Four days later Defendants
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filed a related Civil Complaint against Nathan Peter Runyon in the U.S. District Court, Northern
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District reciting the identical arguments they cited in their Notice of Demurrer and Motion to
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Strike Plaintiff’s FAC. In Defendant’s District Court Case NO. 3:20-cv-02130-MMC Complaint
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they alleged the following cause of actions: Misappropriation of Trade Secrets, Unlawfully
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Accessing a Protected Computer under Computer Fraud and Abuse Act and Breach of Contract.
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Defendant, Nathan Peter Runyon, filed a Motion to Dismiss the case and the parties are
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awaiting the Court’s Ruling. A copy of the District Court Complaint is attached as Exhibit “A.”
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5. In this matter the Court vacated the Case Management Conference scheduled for
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April 16, 2020. On May 20, 2020, the court issued a Notice of Time and Place of Trial setting
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the case for trial on January 25, 2021 (“Notice of Trial”). There have been no requests to
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continue trial before this instant Motion.
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DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO
CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 6. Once Shelter in Place Orders went into effect depositions were continued and it
2 was Defendants’ desire to wait until they could take the depositions in person. I am currently in
3 a dispute with one of Defendant’s counsel, Kimberly Almazan, who has demanded that the
4 deposition of my client take place in person at her office building in downtown San Francisco,
5 in the next two weeks, irrespective of the fact that there has been an uptick in COVID-19 cases
6 and office buildings are being shut down. A true and correct copy of Ms. Almazan’s email is
7 attached as Exhibit “B.”
8 Lead’s Counsel Only Associate and Second Chair in this Matter will be on Maternity
9 Leave From September 1, 2020 through February 1, 2021
10 7. The Case Management Conference scheduled for April 16, 2020 was vacated, as
11 such, counsel was unable to advise the Court of their desired trial dates and issues that would
12 effect their ability to put a trial on in January 2021 (i.e. second chair’s maternity leave). On May
13 20, 2020 the Court served its Notice of Time and Place of Trial setting Trial on January 25,
14 2021. A true and correct copy of the Court’s Notice of Time and Place of Trial is attached as
15 Exhibit “C.” Upon receipt of the Court’s Notice LOCC engaged in meet and confer efforts
16 with Defendants’ counsel to continue the trial date. We advised them that my second chair, and
17 only associate at LOCC, Natalie Xifo would be on maternity leave until February 2021 and
18 would not be available to assist in the pre-trial deadlines or trial. Given that I have no other
19 associates to assist in this case Ms. Xifo’s involvement is indispensable. It would be to my
20 client’s complete detriment if this case were not continued.
21 SF Schools Not Reopening in the Fall and Lead Counsel’s Lack of Childcare
22 8. San Francisco Schools are not reopening for the Fall 2020 academic school year.
23 This severely impacts me as I have two young children who will not be in my full time that I
24 will need to assist with at home long distance online schooling. I have not been able to obtain
25 the requisite necessary childcare that would be required to assist me with the at home schooling
26 of both of my children. With trial commencing on January 25, 2021 for up to 10 consecutive
27 days, including the fact that the majority of the deadlines for propounding and responding to
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DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO
CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 discovery, filing and responding to motions (i.e. Motion for Summary Judgment), taking
2 depositions of all parties and witnesses will fall during the beginning of my children’s school
3 year when I do not have any associates in my office is a significant burden which supports
4 Plaintiff’s request for a continuance of trial and all pre-trial deadlines.
5 Meet and Confer Efforts to Continue Trial
6 9. On July 16, 2020, Defendants’ counsel, Christopher LaVigne, and I spoke on the
7 phone to discuss the outstanding discovery his clients had yet to produce, the District Court case
8 his client filed against my client, continuing the trial date in the instant matter and putting a
9 “freeze” on both the Civil and District Court cases until November 2020.
10 10. On July 17, 2020, Mr. LaVigne emailed explaining that his client would agree to
11 the continuance of the trial in this matter to the end of April 2021 or whatever date the Court set
12 if in return the parties stayed this matter until November 16, 2020, at which time Payward
13 would make its final production of documents. My concern with that approach was it ignored
14 the related case Defendants filed in District Court against Mr. Runyon.I responded to Mr.
15 LaVigne’s email that “Unfortunately I cannot agree to a full "stay" as we also have Payward
16 happening in the District Court action and that will continue per the District Court's Orders,
17 and that would put your client's case at an advantage over my client's case in the lower court.
18 What I can do is agree to a reasonable extension of time for your client to provide mine with a
19 date certain to produce documents in Runyon and we can agree on a related trial extension.
20 However, given the fact that you have filed a case in Federal Court, after we filed our State
21 Court action, I cannot in good faith agree to a "stay" of our action, and not have a similar
22 agreement in the Federal Action. I am sure you can see and understand my position.” Mr.
23 LaVigne responded that his clients were concerned that with the trial being pushed out it would
24 allow for issuance of frivolous and burdensome discovery demands. He concluded that his
25 client would agree to an “… adjournment on the condition that we come to a binding agreement
26 that discovery halts entirely during the period by which we are pushing back the trial.
27 Otherwise, we will proceed to trial on the date set by the court. How would you like to move
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DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO
CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
1 forward?” A true and correct copy of the email exchange is attached as Exhibit “D.”
2 11. Once again, I explained to Mr. LaVigne that I would agree to a later date for
3 production for his client’s document production and a halt on discovery but could not agree to
4 “stay” everything in the case given the related case file by his client in District Court. The
5 discovery in the matters are similar and halting one case, and not the other, would put Payward
6 at an unfair advantage. See Exhibit “D.”
7 12. Based on the foregoing, it is respectfully requested that this Court continue the
8 trial date, pre-trial deadlines, including discovery deadlines and motion practice in this action
9 from January 25, 2021 to May 3, 10, 17, 24, 2021; or June 7, 2021; or July 12, 19, 26, 2021.
10 I declare under penalty of perjury under the laws of the State of California that the
11 foregoing is true and correct.
12 Executed on July 22, 2020, at San Francisco California.
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CLAIRE E. COCHRAN, ESQ.
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DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO
CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES
Exhibit A
Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 1 of 19
PIERCE BAINBRIDGE BECK PRICE & HECHT LLP
1
Andrew E. Calderon (SBN 316673)
2 acalderon@piercebainbridge.com
355 South Grand Ave., 44th Floor
3 Los Angeles, California 90071
(213) 262-9333
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5 PIERCE BAINBRIDGE BECK PRICE & HECHT LLP
6 Christopher N. Lavigne (NY Bar No. 4811121)
(Pending Pro Hac Vice admission)
7 clavigne@piercebainbridge.com
277 Park Avenue, 45th Floor
8 New York, NY 10172
9 Tel.: (646) 694-9666
Fax: (646) 968-412
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11 Attorneys for Plaintiff Payward, Inc., d/b/a Kraken
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13 UNITED STATES DISTRICT COURT
14 NORTHERN DISTRICT OF CALIFORNIA
15 SAN FRANCISCO/OAKLAND DIVISION
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18 PAYWARD, INC., a California Corporation, Case No.: 3:20-cv-2130
d/b/a KRAKEN,
19 COMPLAINT
20 Plaintiff, DEMAND FOR JURY TRIAL
21 v.
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NATHAN PETER RUNYON., an individual,
23 and DOES 1 through 10, inclusive.
24 Defendant.
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COMPLAINT
Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 2 of 19
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
COMPLAINT
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Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 3 of 19
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
8 return 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 emailed Payward and said the laptop had been
20 stolen from his vehicle. To date, the laptop has not been recovered.
21 11. Defendant continued to access the trade secrets and confidential business
22 information on his Company laptop while in unlawful possession of it. Defendants became aware
23 he was accessing and sharing the confidential and trade secret information contained in the laptop
24 because he produced a copy of confidential Company board minutes in connection with his threat
25 of a lawsuit against Payward, which he eventually filed in San Francisco Superior Court. Plaintiff
26 would only have access to the board minutes through his employment at Payward.
27 12. Defendant revealed additional confidential and trade secret information in
28 connection with his lawsuit against Payward, which alleges he was discriminated and retaliated
COMPLAINT
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Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 4 of 19
1 against by Payward based on his veteran status and disabilities and his reporting of certain alleged
2 stock vesting discrepancies. The confidential and trade secret information stored on and
3 accessible through Defendant’s laptop was extensive. The information and data he possessed on
4 his laptop went well beyond the information necessary to support his lawsuit against Payward.
5 Indeed, much of the information was completely unrelated to the lawsuit.
6 13. Among Defendant’s most blatant and unnecessary disclosures of confidential and
7 trade secret information was Defendant’s public exposure of the physical address of Payward’s
8 headquarters, which, up to the date of Defendant’s publicly-filed lawsuit, had not been publicly
9 disclosed, through great efforts by Payward to protect the confidentiality of that address.
10 14. Defendant has first-hand knowledge of Payward’s efforts to keep the physical
11 addresses of its offices, including its headquarters, confidential. Defendant worked at Payward’s
12 headquarters, and was subject to and aware of Payward’s requirement, for example, that all
13 employees and visitors sign non-disclosure agreements regarding the whereabouts and physical
14 address of Payward’s headquarters. Defendant knew that Payward instead made public only a
15 mailing address for its headquarters that is geographically distinct from the headquarters’ actual
16 address.
17 15. Defendant’s publication of the physical address of Payward’s headquarters
18 breached the Confidentiality Agreement and Payward’s standard confidentiality practices, which
19 are and were well known to Defendant. Defendant’s publication of Payward’s physical address,
20 known to him only through his work for Payward and specifically his work at that address, was
21 intentional and malicious.
22 16. Defendant’s misappropriation of Payward’s trade secrets and the breach of his
23 confidentiality agreement have required that Payward spend money and time mitigating the
24 immediate risk of harm and significant continued risk of future harm created by Defendant’s
25 failure to return his laptop upon his termination as required by the Confidentiality Agreement, his
26 continued access to the confidential business and customer information and trade secrets on that
27 laptop, his (at best) carelessness with the laptop that led to it purportedly being stolen by an
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COMPLAINT
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Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 5 of 19
1 unknown third party, and his public revelation of the confidential physical address of Payward’s
2 headquarters.
3 PA R T I E S
4 17. Payward, Inc. d/b/a Kraken is a California corporation, incorporated in the state of
5 Delaware, with its principal place of business in San Francisco, California.
6 18. Defendant Nathan Peter Runyon is an individual and citizen of California who is
7 believed to reside at 456 South Van Ness Avenue, San Francisco, CA 94103.
8 JURISDICTION AND VENUE
9 19. This Court has subject matter jurisdiction because Payward has asserted claims
10 against Defendant pursuant to 28 U.S.C. § 1331 for misappropriation of trade secrets under the
11 Defend Trade Secrets Act (“DTSA”) and 10 U.S.C. § 1030 for violation of the Computer Fraud
12 and Abuse Act (“CFAA”). This Court has supplemental or pendent jurisdiction over Payward’s
13 remaining claims pursuant to 28 U.S.C. § 1367 because such claims are so related to Payward’s
14 federal DTSA claim that they form part of the same case or controversy under Article III of the
15 United States Constitution.
16 20. Venue is proper in the Northern District of California pursuant to 28 U.S.C. §
17 1391(b)(1) because Payward and Defendant are residents of San Francisco, CA. Venue is also
18 appropriate in this district pursuant to 28 U.S.C, § 1391(b)(2) because the events that gave rise to
19 this complaint occurred in this district.
20 FA C T U A L A L L E G AT I O N S
21 A. Payward Is One of the Largest and Oldest Bitcoin Exchanges in the World
22 21. Payward formed in 2011 in the nascent market of cryptocurrency trading and
23 launched its trading platform two years later in 2013. Payward’s trading platform allows
24 customers to buy and trade Bitcoin and other cryptocurrencies online. Payward has grown to
25 become a leading platform with hundreds of employees and operations spanning the globe.
26 22. The cryptocurrency trading market is intensely competitive. Security is among
27 the leading factors that consumers consider when selecting a trading platform and a critical
28 element for business growth. Payward’s reputation for security translates to consumer confidence
COMPLAINT
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Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 6 of 19
1 and leads to greater usage. Greater usage helps improve liquidity—how easily assets can be
2 bought or sold at a stable price—by raising trade volume and active traders. Increased liquidity
3 in turn attracts more consumers.
4 23. The cryptocurrency trading industry is exceptionally prone to hacking attempts
5 and exploitation of trade secrets. The rise in popularity and value of cryptocurrencies has made
6 trading platforms a prime target for hackers. See Brian Fung, Why bitcoin exchanges keep getting
7 hacked – and how to protect yourself, The Switch, June 20, 2018 (“The price of bitcoin took a tumble
8 early Wednesday after a major South Korea-based cryptocurrency exchange, Bithumb, admitted
9 hackers made off with more than $31 million worth of virtual currency.”), available at
10 https://www.washingtonpost.com/news/the-switch/wp/2018/06/20/why-bitcoin-exchanges-keep-
11 getting-hacked-and-how-to-protect-yourself/?utm_term=.ab72f3bcf185.
12 24. Since 2011, there have been 56 documented hacks of cryptocurrency exchanges. See
13 Lauren Yates, Memorandum re Meeting With Bitwise Asset Management, Inc., NYSE Arca, Inc., and
14 Vedder Price P.C., SEC, Mar. 20, 2019, available
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1 Claire E. Cochran (SBN 222529) Natalie A. Xifo (SBN 280930) ELECTRONICALLY 2 LAW OFFICES OF CLAIRE COCHRAN, P.C. 100 Pine Street, Suite 1250 F I L E D 3 Superior Court of California, San Francisco, CA 94111 County of San Francisco 4 Telephone: (415) 580-6019 07/24/2020 Facsimile: (415) 745-3301 Clerk of the Court 5 BY: JUDITH NUNEZ Deputy Clerk 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 PLAINTIFF NATHAN PETER Plaintiff, RUNYON’S NOTICE OF MOTION TO 13 CONTINUE TRIAL DATES AND v. PRETRIAL DEADLINES 14 [Filed Concurrently with Memorandum of 15 PAYWARD, INC., a California Corporation Points and Authorities; Declaration of Claire E. Cochran, Esq. and [Proposed] Order] d/b/a KRAKEN; and KAISER NG an individual 16 and DOES 1-50, inclusive Hearing Date: August 20, 2020 17 Time: 9:30 a.m. Dept.: 206 Defendants. 18 Date Action Filed: November 26, 2019 19 Trial Date: January 25, 2021 20 21 22 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// Page | 1 PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 TO DEFENDANTS AND THEIR ATTORNEYS OF RECORD: 2 NOTICE IS HEREBY GIVEN THAT on August 20, 2020, at 9:30 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”) and 5 through his attorneys of record, will and hereby does move for an Order continuing the trial date 6 hereto set for January 25, 2021, all discovery and motion cut-offs dates. 7 The trial is currently set for January 25, 2021. Plaintiff respectfully requests an order 8 continuing the trial dates and pre-trial deadlines, including discovery deadlines and motion 9 practice in this action from January 25, 2021 to 10 • May 3, 10, 17, 24, 2021; or 11 • June 7, 2021; or 12 • July 12, 19, 26, 2021. 13 Plaintiff requests that all discovery deadlines be extended to correspond to the new trial 14 date. 15 This relief is sought pursuant to California Rules of Court, Rule 3.1332 and San 16 Francisco Superior Court Local Rules of Court, Rule 6.0(B), and good cause exists for the 17 continuance of trial because of a plethora of issues, including but not limited to, Shelter in Place 18 Orders and its effects it has had on lead counsel’s ability to obtain any child care, lead counsel’s 19 only associate and second chair on this matter, scheduled to take maternity leave September 1, 20 2020 through February 1, 2021, managing the ongoing the outstanding discovery responses and 21 documents owed by Defendants, and scheduling of depositions for all parties and witnesses 22 during the Shelter in Place Orders. After having engaged in multiple meet and confer 23 discussions, Defendants would only agree to a continuance of the trial in exchange for a 24 complete stay of this matter – including but not limited to all filings, motion practice, discovery 25 and communications about discovery disputes – until November 16, 2020, at which time 26 Defendants would then make its final production of documents. While Plaintiff’s counsel was 27 amenable to an extension of time to allow Defendant’s production to be finalized by November, 28 Page | 2 PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 she could not agree to “stay” everything given that Defendant, Payward, filed a related action 2 against Nathan Peter Runyon in Northern District Court. 3 Plaintiff’s Notice of Motion to Continue the trial and corresponding pretrial deadlines is 4 based upon this Notice, the accompanying Declaration of Claire Cochran, Esq. and a 5 Memorandum of Points and Authorities. 6 7 Dated: July 23, 2020 LAW OFFICES OF CLAIRE COCHRAN PC 8 9 ____________________________ CLAIRE E. COCHRAN 10 Attorneys for Plaintiff, 11 NATHAN PETER RUNYON 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page | 3 PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. BACKGROUND 3 This matter was filed on November 26, 2019. Plaintiff filed a First Amended Complaint 4 (“FAC”) on January 6, 2020. By February 2020, the Defendants filed a Notice of Demurrer and 5 Motion to Strike Plaintiff’s FAC (“Defendants’ Motions”). The hearing on Defendants’ Motions 6 was held on March 11, 2020. The Court overruled Defendants’ request to demurrer Plaintiff’s 7 FEHA causes of action, fifth, eighth, ninth and tenth causes of action. The Court denied Defendant’s Motion to Strike Irrelevant, False or Improper Matters in Plaintiff’s FAC in its 8 entirety. 9 On March 23, 2020, Defendants filed their Answer. Four days later Defendants filed a 10 related Civil Complaint against Nathan Peter Runyon in the U.S. District Court, Northern 11 District reciting the identical arguments they cited in their Notice of Demurrer and Motion to 12 Strike Plaintiff’s FAC. In Defendant’s District Court Case NO. 3:20-cv-02130-MMC Complaint 13 they alleged the following cause of actions: Misappropriation of Trade Secrets, Unlawfully 14 Accessing a Protected Computer under Computer Fraud and Abuse Act and Breach of Contract. 15 Defendant, Nathan Peter Runyon, filed a Motion to Dismiss the case and the parties are awaiting 16 the Court’s Ruling. 17 In this matter the Court vacated the Case Management Conference scheduled for April 18 16, 2020. On May 20, 2020, the court issued a Notice of Time and Place of Trial setting the case 19 for trial on January 25, 2021 (“Notice of Trial”). There have been no requests to continue trial 20 before this Notice of Motion to Continue Trial and Pre-Trial Deadlines. 21 Counsel for the parties have been meeting and conferring about Defendants’ production 22 of documents since March 2020. Plaintiff’s counsel granted three extensions for them to produce 23 after lead counsel, Christopher LaVigne changed law firms. Due to COVID-19 the parties have 24 postponed depositions and currently are in disagreement with Defendant’s counsel who are 25 demanding that Plaintiff and counsel physically appear for depositions in the next few weeks 26 instead of virtual depositions. 27 28 Page | 1 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 Upon receipt of the Court’s Notice of Trial (received in June 2020), Plaintiff’s counsel 2 requested that Defendants agree to a continuance of the trial date given that Natalie A. Xifo, the 3 second chair in the matter, would be on maternity leave throughout the pre-trial deadlines and 4 continuing through trial. Defendants’ counsel would only agree to a continuance in exchange for 5 a complete stay of this matter – including but not limited to all filings, motion practice, discovery 6 and communications about discovery disputes – until November 16, 2020, at which time 7 Defendants would then make its final production of documents. Absent a stay of the case Defendants refused to agree to continue the trial. As such, Plaintiff was forced to bring the 8 instant Motion to Continue Trial and all Pre-Trial Deadlines. 9 II. ARGUMENT 10 A. Good Cause Exists to Continue the Trial 11 A court may grant a continuance before or during trial on an affirmative showing of 12 good cause. Cal. R. Ct. Rule 3.1332 (c)(3), (6) and (7). In addition, good cause may be 13 demonstrated by the fact there have not been any continuances granted before and there will be 14 no prejudice to the parties or witnesses to delay this trial. Id. (d)(2) and (5). 15 Here, good cause exists to continue the trial for several reasons (1) lead counsel’s only 16 associate at LOCC and her second chair will be on maternity leave beginning September 12, 17 2020 through February 1, 2021; (2) due to the ongoing pandemic and the recent orders from the 18 California Governor, lead counsel’s children are not physically returning to school in Fall 2020, 19 and will be at home for long distance learning, thus creating a significant issue concerning lead 20 counsel’s ability to obtain appropriate childcare; (3) with all of the pre-trial deadlines, motion 21 practice and discovery cut-off falling during the beginning of her children’s school year with 22 both of her young children at home with no childcare in conjunction with her second chair being 23 out on maternity leave, lead counsel will be unable to meet these deadlines without enduring 24 significant hardship, thus causing her client severe prejudice. 25 After the Court canceled the CMC, lead counsel was unable to advise the Court of these 26 issues before a trial date was set. No other continuances of the trial dates have been grated 27 before in this case. There will be no prejudice to Defendants to delay this trial (as they initially 28 Page | 2 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 already agreed to a date at the end of April 2021 or date of the Court’s choosing thereafter) 2 while in comparison Plaintiff will be severely prejudiced if this trial were to proceed on January 3 25, 2021. B. Continuance Sought as Soon as Reasonably Practical 4 A party seeking a continuance of the date set for trial, and all discovery and motion cut- 5 offs dates will be based on new trial date whether contested or uncontested or stipulated to by the 6 parties, must make the motion or application as soon as reasonably practical once the necessity 7 for the continuance is discovered. Cal. R. Ct. Rule 3.1332(b). Here, after receiving the Court’s 8 Notice of Trial in June 2020, Plaintiff’s counsel requested that Defendants agree to a continuance 9 of the trial. It was not until July 22, 2020 that it was determined that Defendants no longer would 10 agree to a continuance absent a “stay” of the case until November 16, 2020, while their case 11 against Nathan Peter Runyon in District Court would remain ongoing, allowing them an unfair 12 advantage to continue to obtain discovery, set depositions and move forward with aggressive 13 motion practice in that venue while Plaintiff’s hands remained tied in Superior Court. As such, 14 Plaintiff was forced to file the underlying Motion to Continue the Trial and all Pre-Trial 15 Deadlines and seek the Court’s relief. 16 III. CONCLUSION 17 For all of the reasons stated above, and pursuant to the authorities cited herein, Plaintiff 18 respectfully requests the Court continue the trial dates and pre-trial deadlines, including 19 discovery deadlines and motion practice in this matter to May 3, 10, 17, 24, 2021; or June 7, 20 2021; or July 12, 19, 26, 2021. 21 22 23 Dated: July 23, 2020 LAW OFFICES OF CLAIRE COCHRAN PC 24 ____________________________ 25 CLAIRE E. COCHRAN 26 Attorneys for Plaintiff, NATHAN PETER RUNYON 27 28 Page | 3 PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 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. On March 23, 2020, Defendants filed their Answer. Four days later Defendants 17 filed a related Civil Complaint against Nathan Peter Runyon in the U.S. District Court, Northern 18 District reciting the identical arguments they cited in their Notice of Demurrer and Motion to 19 Strike Plaintiff’s FAC. In Defendant’s District Court Case NO. 3:20-cv-02130-MMC Complaint 20 they alleged the following cause of actions: Misappropriation of Trade Secrets, Unlawfully 21 Accessing a Protected Computer under Computer Fraud and Abuse Act and Breach of Contract. 22 Defendant, Nathan Peter Runyon, filed a Motion to Dismiss the case and the parties are 23 awaiting the Court’s Ruling. A copy of the District Court Complaint is attached as Exhibit “A.” 24 5. In this matter the Court vacated the Case Management Conference scheduled for 25 April 16, 2020. On May 20, 2020, the court issued a Notice of Time and Place of Trial setting 26 the case for trial on January 25, 2021 (“Notice of Trial”). There have been no requests to 27 continue trial before this instant Motion. 28 Page | 1 DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 6. Once Shelter in Place Orders went into effect depositions were continued and it 2 was Defendants’ desire to wait until they could take the depositions in person. I am currently in 3 a dispute with one of Defendant’s counsel, Kimberly Almazan, who has demanded that the 4 deposition of my client take place in person at her office building in downtown San Francisco, 5 in the next two weeks, irrespective of the fact that there has been an uptick in COVID-19 cases 6 and office buildings are being shut down. A true and correct copy of Ms. Almazan’s email is 7 attached as Exhibit “B.” 8 Lead’s Counsel Only Associate and Second Chair in this Matter will be on Maternity 9 Leave From September 1, 2020 through February 1, 2021 10 7. The Case Management Conference scheduled for April 16, 2020 was vacated, as 11 such, counsel was unable to advise the Court of their desired trial dates and issues that would 12 effect their ability to put a trial on in January 2021 (i.e. second chair’s maternity leave). On May 13 20, 2020 the Court served its Notice of Time and Place of Trial setting Trial on January 25, 14 2021. A true and correct copy of the Court’s Notice of Time and Place of Trial is attached as 15 Exhibit “C.” Upon receipt of the Court’s Notice LOCC engaged in meet and confer efforts 16 with Defendants’ counsel to continue the trial date. We advised them that my second chair, and 17 only associate at LOCC, Natalie Xifo would be on maternity leave until February 2021 and 18 would not be available to assist in the pre-trial deadlines or trial. Given that I have no other 19 associates to assist in this case Ms. Xifo’s involvement is indispensable. It would be to my 20 client’s complete detriment if this case were not continued. 21 SF Schools Not Reopening in the Fall and Lead Counsel’s Lack of Childcare 22 8. San Francisco Schools are not reopening for the Fall 2020 academic school year. 23 This severely impacts me as I have two young children who will not be in my full time that I 24 will need to assist with at home long distance online schooling. I have not been able to obtain 25 the requisite necessary childcare that would be required to assist me with the at home schooling 26 of both of my children. With trial commencing on January 25, 2021 for up to 10 consecutive 27 days, including the fact that the majority of the deadlines for propounding and responding to 28 Page | 2 DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 discovery, filing and responding to motions (i.e. Motion for Summary Judgment), taking 2 depositions of all parties and witnesses will fall during the beginning of my children’s school 3 year when I do not have any associates in my office is a significant burden which supports 4 Plaintiff’s request for a continuance of trial and all pre-trial deadlines. 5 Meet and Confer Efforts to Continue Trial 6 9. On July 16, 2020, Defendants’ counsel, Christopher LaVigne, and I spoke on the 7 phone to discuss the outstanding discovery his clients had yet to produce, the District Court case 8 his client filed against my client, continuing the trial date in the instant matter and putting a 9 “freeze” on both the Civil and District Court cases until November 2020. 10 10. On July 17, 2020, Mr. LaVigne emailed explaining that his client would agree to 11 the continuance of the trial in this matter to the end of April 2021 or whatever date the Court set 12 if in return the parties stayed this matter until November 16, 2020, at which time Payward 13 would make its final production of documents. My concern with that approach was it ignored 14 the related case Defendants filed in District Court against Mr. Runyon.I responded to Mr. 15 LaVigne’s email that “Unfortunately I cannot agree to a full "stay" as we also have Payward 16 happening in the District Court action and that will continue per the District Court's Orders, 17 and that would put your client's case at an advantage over my client's case in the lower court. 18 What I can do is agree to a reasonable extension of time for your client to provide mine with a 19 date certain to produce documents in Runyon and we can agree on a related trial extension. 20 However, given the fact that you have filed a case in Federal Court, after we filed our State 21 Court action, I cannot in good faith agree to a "stay" of our action, and not have a similar 22 agreement in the Federal Action. I am sure you can see and understand my position.” Mr. 23 LaVigne responded that his clients were concerned that with the trial being pushed out it would 24 allow for issuance of frivolous and burdensome discovery demands. He concluded that his 25 client would agree to an “… adjournment on the condition that we come to a binding agreement 26 that discovery halts entirely during the period by which we are pushing back the trial. 27 Otherwise, we will proceed to trial on the date set by the court. How would you like to move 28 Page | 3 DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES 1 forward?” A true and correct copy of the email exchange is attached as Exhibit “D.” 2 11. Once again, I explained to Mr. LaVigne that I would agree to a later date for 3 production for his client’s document production and a halt on discovery but could not agree to 4 “stay” everything in the case given the related case file by his client in District Court. The 5 discovery in the matters are similar and halting one case, and not the other, would put Payward 6 at an unfair advantage. See Exhibit “D.” 7 12. Based on the foregoing, it is respectfully requested that this Court continue the 8 trial date, pre-trial deadlines, including discovery deadlines and motion practice in this action 9 from January 25, 2021 to May 3, 10, 17, 24, 2021; or June 7, 2021; or July 12, 19, 26, 2021. 10 I declare under penalty of perjury under the laws of the State of California that the 11 foregoing is true and correct. 12 Executed on July 22, 2020, at San Francisco California. 13 14 15 CLAIRE E. COCHRAN, ESQ. 16 17 18 19 20 21 22 23 24 25 26 27 28 Page | 4 DECLARATION OF CLAIRE COCHRAN, ESQ. ISO OF PLAINTIFF’S NOTICE OF MOTION TO CONTINUE TRIAL DATES AND PRE-TRIAL DEADLINES Exhibit A Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 1 of 19 PIERCE BAINBRIDGE BECK PRICE & HECHT LLP 1 Andrew E. Calderon (SBN 316673) 2 acalderon@piercebainbridge.com 355 South Grand Ave., 44th Floor 3 Los Angeles, California 90071 (213) 262-9333 4 5 PIERCE BAINBRIDGE BECK PRICE & HECHT LLP 6 Christopher N. Lavigne (NY Bar No. 4811121) (Pending Pro Hac Vice admission) 7 clavigne@piercebainbridge.com 277 Park Avenue, 45th Floor 8 New York, NY 10172 9 Tel.: (646) 694-9666 Fax: (646) 968-412 10 11 Attorneys for Plaintiff Payward, Inc., d/b/a Kraken 12 13 UNITED STATES DISTRICT COURT 14 NORTHERN DISTRICT OF CALIFORNIA 15 SAN FRANCISCO/OAKLAND DIVISION 16 17 18 PAYWARD, INC., a California Corporation, Case No.: 3:20-cv-2130 d/b/a KRAKEN, 19 COMPLAINT 20 Plaintiff, DEMAND FOR JURY TRIAL 21 v. 22 NATHAN PETER RUNYON., an individual, 23 and DOES 1 through 10, inclusive. 24 Defendant. 25 26 27 28 COMPLAINT Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 2 of 19 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 COMPLAINT 1 Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 3 of 19 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 8 return 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 emailed Payward and said the laptop had been 20 stolen from his vehicle. To date, the laptop has not been recovered. 21 11. Defendant continued to access the trade secrets and confidential business 22 information on his Company laptop while in unlawful possession of it. Defendants became aware 23 he was accessing and sharing the confidential and trade secret information contained in the laptop 24 because he produced a copy of confidential Company board minutes in connection with his threat 25 of a lawsuit against Payward, which he eventually filed in San Francisco Superior Court. Plaintiff 26 would only have access to the board minutes through his employment at Payward. 27 12. Defendant revealed additional confidential and trade secret information in 28 connection with his lawsuit against Payward, which alleges he was discriminated and retaliated COMPLAINT 2 Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 4 of 19 1 against by Payward based on his veteran status and disabilities and his reporting of certain alleged 2 stock vesting discrepancies. The confidential and trade secret information stored on and 3 accessible through Defendant’s laptop was extensive. The information and data he possessed on 4 his laptop went well beyond the information necessary to support his lawsuit against Payward. 5 Indeed, much of the information was completely unrelated to the lawsuit. 6 13. Among Defendant’s most blatant and unnecessary disclosures of confidential and 7 trade secret information was Defendant’s public exposure of the physical address of Payward’s 8 headquarters, which, up to the date of Defendant’s publicly-filed lawsuit, had not been publicly 9 disclosed, through great efforts by Payward to protect the confidentiality of that address. 10 14. Defendant has first-hand knowledge of Payward’s efforts to keep the physical 11 addresses of its offices, including its headquarters, confidential. Defendant worked at Payward’s 12 headquarters, and was subject to and aware of Payward’s requirement, for example, that all 13 employees and visitors sign non-disclosure agreements regarding the whereabouts and physical 14 address of Payward’s headquarters. Defendant knew that Payward instead made public only a 15 mailing address for its headquarters that is geographically distinct from the headquarters’ actual 16 address. 17 15. Defendant’s publication of the physical address of Payward’s headquarters 18 breached the Confidentiality Agreement and Payward’s standard confidentiality practices, which 19 are and were well known to Defendant. Defendant’s publication of Payward’s physical address, 20 known to him only through his work for Payward and specifically his work at that address, was 21 intentional and malicious. 22 16. Defendant’s misappropriation of Payward’s trade secrets and the breach of his 23 confidentiality agreement have required that Payward spend money and time mitigating the 24 immediate risk of harm and significant continued risk of future harm created by Defendant’s 25 failure to return his laptop upon his termination as required by the Confidentiality Agreement, his 26 continued access to the confidential business and customer information and trade secrets on that 27 laptop, his (at best) carelessness with the laptop that led to it purportedly being stolen by an 28 COMPLAINT 3 Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 5 of 19 1 unknown third party, and his public revelation of the confidential physical address of Payward’s 2 headquarters. 3 PA R T I E S 4 17. Payward, Inc. d/b/a Kraken is a California corporation, incorporated in the state of 5 Delaware, with its principal place of business in San Francisco, California. 6 18. Defendant Nathan Peter Runyon is an individual and citizen of California who is 7 believed to reside at 456 South Van Ness Avenue, San Francisco, CA 94103. 8 JURISDICTION AND VENUE 9 19. This Court has subject matter jurisdiction because Payward has asserted claims 10 against Defendant pursuant to 28 U.S.C. § 1331 for misappropriation of trade secrets under the 11 Defend Trade Secrets Act (“DTSA”) and 10 U.S.C. § 1030 for violation of the Computer Fraud 12 and Abuse Act (“CFAA”). This Court has supplemental or pendent jurisdiction over Payward’s 13 remaining claims pursuant to 28 U.S.C. § 1367 because such claims are so related to Payward’s 14 federal DTSA claim that they form part of the same case or controversy under Article III of the 15 United States Constitution. 16 20. Venue is proper in the Northern District of California pursuant to 28 U.S.C. § 17 1391(b)(1) because Payward and Defendant are residents of San Francisco, CA. Venue is also 18 appropriate in this district pursuant to 28 U.S.C, § 1391(b)(2) because the events that gave rise to 19 this complaint occurred in this district. 20 FA C T U A L A L L E G AT I O N S 21 A. Payward Is One of the Largest and Oldest Bitcoin Exchanges in the World 22 21. Payward formed in 2011 in the nascent market of cryptocurrency trading and 23 launched its trading platform two years later in 2013. Payward’s trading platform allows 24 customers to buy and trade Bitcoin and other cryptocurrencies online. Payward has grown to 25 become a leading platform with hundreds of employees and operations spanning the globe. 26 22. The cryptocurrency trading market is intensely competitive. Security is among 27 the leading factors that consumers consider when selecting a trading platform and a critical 28 element for business growth. Payward’s reputation for security translates to consumer confidence COMPLAINT 4 Case 3:20-cv-02130 Document 1 Filed 03/27/20 Page 6 of 19 1 and leads to greater usage. Greater usage helps improve liquidity—how easily assets can be 2 bought or sold at a stable price—by raising trade volume and active traders. Increased liquidity 3 in turn attracts more consumers. 4 23. The cryptocurrency trading industry is exceptionally prone to hacking attempts 5 and exploitation of trade secrets. The rise in popularity and value of cryptocurrencies has made 6 trading platforms a prime target for hackers. See Brian Fung, Why bitcoin exchanges keep getting 7 hacked – and how to protect yourself, The Switch, June 20, 2018 (“The price of bitcoin took a tumble 8 early Wednesday after a major South Korea-based cryptocurrency exchange, Bithumb, admitted 9 hackers made off with more than $31 million worth of virtual currency.”), available at 10 https://www.washingtonpost.com/news/the-switch/wp/2018/06/20/why-bitcoin-exchanges-keep- 11 getting-hacked-and-how-to-protect-yourself/?utm_term=.ab72f3bcf185. 12 24. Since 2011, there have been 56 documented hacks of cryptocurrency exchanges. See 13 Lauren Yates, Memorandum re Meeting With Bitwise Asset Management, Inc., NYSE Arca, Inc., and 14 Vedder Price P.C., SEC, Mar. 20, 2019, available