Premier Valley Bank v. Nguyen ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 PREMIER VALLEY BANK, a California No. 1:20-cv-00900-NONE-EPG Corporation, 12 ORDER GRANTING PLAINTIFF Plaintiff, PREMIER VALLEY BANK’S 13 TEMPORARY RESTRAINING v. ORDER; AND ORDER TO SHOW CAUSE 14 REGARDING PRELIMINARY HOA NGUYEN, an Individual, and DOES 1 INJUNCTION; 15 through 10, Inclusive, ORDER DENYING WITHOUT 16 Defendants. PREJUDICE PLAINTIFF’S REQUEST FOR EXPEDITED DISCOVERY. 17 18 (Doc. No. 2.) 19 Before the court for decision is Plaintiff Premier Valley Bank’s (PVB) Application for 20 Temporary Restraining Order and Order to Show Cause Regarding Preliminary Injunction 21 (Application). (Doc. No. 2.) Having reviewed the Application in light of the entire record, the 22 court finds as follows: 23 1. PVB has established that it is likely to succeed on the merits of its claims, 24 including in particular its claims for misappropriation of trade secrets, breach of contract, 25 interference with economic relations and contract, unfair competition, and computer fraud and 26 abuse, against PVB’s former employee, Defendant Hoa Nguyen (Nguyen). PVB has presented 27 sufficient evidence to establish that Nguyen has misappropriated, disclosed, and/or utilized PVB’s 1 that Nguyen has misappropriated and is continuing to misappropriate PVB’s trade secrets and 2 confidential information including, but not limited to, confidential information relating their 3 identity of their customers, the services they purchase, their financial information, account 4 information, and information regarding PVB’s prospective economic relationships. This 5 information can be used to unfairly compete against PVB. In addition, PVB has presented 6 evidence that defendant’s conduct puts PVB’s customers at risk because that highly confidential 7 information could be used for identity theft or other fraudulent activity. 8 2. PVB has established that it will suffer immediate and irreparable injury unless 9 defendant and those acting in concert with him are restrained from using PVB’s confidential 10 information and/or trade secrets pending trial or final judgment in this action. PVB has presented 11 sufficient evidence to establish that the value of PVB trade secrets has been placed at risk; and it 12 will continue to lose goodwill with its customers should defendant not be enjoined from his 13 wrongful conduct, and any further disclosure or use of this information could cause further harm 14 to PVB and its banking customers. 15 3. PVB has established that the balance of hardships tips sharply in PVB’s favor in 16 that the only damage to defendant is by entry of this order is that he will be prohibited from 17 wrongfully retaining and/or using PVB’s trade secrets and confidential information and 18 confidential information about its banking customers. 19 4. PVB has established that issuance of injunctive relief will serve the public interest 20 in protecting PVB’s trade secret information, the personally protected information belonging to 21 its customers, and promoting fair competition. 22 5. PVB has provided notice to defendant of the Application and this lawsuit via 23 electronic mail. 24 6. PVB has also requested expedited discovery. (Doc. No. 2 at 16–17.) Rule 26(d) 25 of the Federal Rules of Civil Procedure generally prohibits a party from seeking discovery from 26 any source before the parties have conferred as required by Rule 26(f). See Fed. R. Civ. P. 26(d). 27 In the Ninth Circuit, courts use the “good cause” standard to determine whether discovery should 1 Inc., 208 F.R.D. 273, 275 (N.D. Cal. 2002). Good cause may be found where the need for 2 expedited discovery, in consideration of the administration of justice, outweighs the prejudice to 3 the responding party. Id. at 276. In considering whether good cause exists, factors courts may 4 consider include: (1) whether a preliminary injunction is pending; (2) the breadth of the discovery 5 request; (3) the purpose for requesting the expedited discovery; (4) the burden on the defendants 6 to comply with the requests; and (5) how far in advance of the typical discovery process the 7 request was made. Am. LegalNet, Inc. v. Davis, 673 F. Supp. 2d 1063, 1067 (C.D. Cal. 2009). 8 The party seeking expedited discovery in advance of the Rule 26(f) conference has the burden of 9 showing good cause for the requested departure from usual discovery procedures. Id. at 1066. At 10 this stage of the case, the court does not believe PVB has met its burden in this regard. Its generic 11 request for “an order requiring production of all relevant documents on an expedited basis, 12 production of Nguyen’s personal computers for expert inspection, and to depose [d]efendant day 13 to day until the deposition is completed on issues relevant to” this order is overbroad and not 14 sufficiently justified. Therefore, the request for expedited discovery is DENIED WITHOUT 15 PREJUDICE. Should PVB choose to renew its request, that matter is referred to the assigned 16 magistrate judge for appropriate resolution. PVB shall contact Michelle Rooney, Courtroom 17 Deputy Clerk to Magistrate Judge Erica Grosjean, at (559) 499−5962, to set a hearing on any 18 renewed motion for expedited discovery. 19 IT IS HEREBY ORDERED AND DECREED THAT: 20 A. A Temporary Restraining Order shall immediately issue. Security in the amount 21 of $1,000.00 shall be posted by PVB by no later than 4:30 p.m. on the July 3, 2020. 22 B. Defendant, his agents and employees, and all other persons and entities in active 23 concert, participation or privity with defendant are prohibited from retaining possession of, 24 directly or indirectly using, disclosing or transmitting for any purpose, PVB’s confidential and/or 25 proprietary information or documents, files, or data belonging to PVB, including, but not limited 26 to: information pertaining to PVB bank accounts; PVB customer information including customer 27 lists or identities, customer contact information, bank account numbers, social security numbers; 1 customer inquiries or strategies; internal PVB memoranda, emails, or other communications; 2 pricing, discount terms; profitability information; service or loan agreement expirations; 3 marketing plans, potential customers and leads; documents that reflect information about PVB 4 employees; and all other confidential or trade secret business information. 5 C. Defendant shall return to PVB all documents, materials and information 6 constituting, containing, summarizing or extracting PVB’s confidential and/or proprietary 7 information or documents, files or data belonging to PVB, including, but not limited to: PVB’s 8 confidential and/or proprietary information or documents, files, or data belonging to PVB; 9 information pertaining to PVB bank accounts; PVB customer information including customer 10 lists or identities, customer contact information, bank account numbers, social security numbers; 11 tax identification numbers, customer preferences; customer plans, customer signature blocks, 12 customer inquiries or strategies; internal PVB memoranda, emails, or other communications; 13 pricing, discount terms; profitability information; service or loan agreement expirations; 14 marketing plans, potential customers and leads; documents that reflect information about PVB 15 employees; and all other confidential or trade secret business information. 16 D. Defendant must turn over all hard-copy documents and all hard-drives, thumb- 17 drives or other removable electronic devices used to copy or transmit the above-mentioned 18 categories of information within 48 hours from receiving notice of the court’s order. Defendant 19 must purge or destroy within 48 hours from receiving notice of the court’s order any and all 20 copies, recordings, electronic copies, or reproductions of the above-mentioned information, 21 provided, however, that a copy of any and all PVB information shall be first returned to PVB. 22 E. File with this court and serve on PVB’s counsel, within 7 days after service of the 23 restraining order, a written report, signed under oath by defendant Nguyen personally, setting 24 forth in detail the manner and form in which defendant has complied with the court’s order. 25 G. Defendant is further ordered to show cause in writing on or before noon on Friday, 26 July 10, 2020, why a preliminary injunction should not be issued against him. The court will 27 thereafter review that filing and determine whether a reply is authorized and/or whether a hearing Coe 4: OU IN IN SOM PO ae OY VY VI 1 I. This order shall remain in full force and effect until fourteen days from date of 2 entry of this order, or until such other time as the court specifically orders. 3 J. Defendant can apply to the court for modification/dissolution of this order on two || (2) days—notice or such shorter notice as the court may allow. See Local Rule 231 and FRCP 5 || 65(b). 6 K. PVB shall immediately cause a copy of this order to be served by email and by 7 || overnight courier upon defendant. Thereafter, PVB shall make every effort to effectuate prompt 8 || personal service of this lawsuit and all papers filed therein, including this order, upon defendant. 9 ||IT IS SO ORDERED. a st Dated: _ June 30, 2020 LL A Yoog 11 UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28