Biotronik, Inc. vs. Letarte

All parties or their counsel are ORDERED to appear at the Status Conference ready to give the court an update on the status of the filing and service of, and response to the First Amended Complaint.

Pending Motion

Plaintiff Biotronik, Inc. moves for leave to file the First Amended Complaint attached as Exhibit 1 to the Declaration of Andrew J. Pieper in Support of Plaintiff Biotronik, Inc.’s Amended Motion for Leave to File Amended Complaint.

Standard for Leave to Amend (Upon Motion of a Party)

The Civil Procedure Code provides that:

The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.

(Code Civ. Proc., § 473, subd. (a)(1).)

Leave to amend should be granted liberally at all stages of the proceedings in order to accomplish substantial justice for both parties and to resolve cases on their merits. (See Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489; IMO Development Corp. v. Dow Corning (1982) 135 Cal.App.3d 451, 461.)

As the Court of Appeal has explained:

[T]rial courts should be guided by two general principles: (1) whether facts or legal theories are being changed and (2) whether the opposing party will be prejudiced by the proposed amendment. Frequently, each principle represents a different side of the same coin: If new facts are being alleged, prejudice may easily result because of the inability of the other party to investigate the validity of the factual allegations while engaged in trial or to call rebuttal witnesses. If the same set of facts supports merely a different theory – for example, an easement as opposed to a fee – no prejudice can result.

(City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.)

With respect to the first requirement, “[t]he basic rule applicable to amendments to conform to proof is that the amended pleading must be based upon the same general set of facts as those upon which the cause of action or defense as originally pleaded was grounded.” (Union Bank v. Wendland (1976) 54 Cal.App.3d 393, 400-401.)

In other words, “[t]he power to permit amendments is interpreted very liberally as long as the plaintiff does not attempt to state facts which give rise to a wholly distinct and different legal obligation against the defendant.” (Herrera v. Superior Court (1984) 158 Cal.App.3d 255, 259.)

With respect to the second requirement, prejudice that may support denying amendment includes “delay in trial, loss of critical evidence, or added costs of preparation.” (Solit v. Tokai Bank, Ltd. New York Branch (1999) 68 Cal.App.4th 1435, 1448.)

It is “an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048; see also Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530 [”If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend . . . .”], citations and quotations omitted.)

It is also an abuse of discretion to refuse amendment where that “results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense.” (Morgan v. Superior Court, supra, 172 Cal.App.2d at p. 530.) This is true even if leave to amend is sought as late as the time of trial or even during trial. (See Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565; Rainer v. Community Memorial Hosp. (1971) 18 Cal.App.3d 240, 251-256.) Thus, “[i]n the furtherance of justice, trial courts may allow amendments to pleadings and if necessary, postpone trial.” (Honig v. Financial Corp. of America (1992) 6 Cal.App.4th 960, 965.)

Proposed First Amended Complaint

Here, Plaintiff seeks to add seven causes of action: two causes of action for breach of contract – duty of loyalty against each individual Defendant, two causes of action for breach of fiduciary duty against each individual Defendant, and three causes of action for restitution/unjust enrichment against each Defendant.

Plaintiff contends that each of these causes of action arise out of the same general set facts as those asserted in the original Complaint.

In addition, Plaintiff points out that claims it was unaware of the bases for these causes of action until discovery revealed that the individual Defendants had diverted their time and services to Defendant Inari Medical, Inc. while still working for Plaintiff

Thus, Plaintiff has made a prima facie showing that it is not seeking to inject wholly different facts or legal theories into this litigation and that it

acted in a reasonably prompt manner so as to not cause undue prejudice.

Defendants contend that the amendment is futile because the proposed additional causes of action lack any evidentiary support.

However, where the non-moving party argues that a proposed pleading is futile, “[l]eave to amend should be denied only where the facts are not in dispute, and the nature of the plaintiff’s claim is clear, but under substantive law, no liability exists and no amendment would change the result.” (Howard v. County of San Diego (2010) 184 Cal.App.4th 1422, 1428.)

Defendants have no showing that the facts are undisputed and that by law, they are not liable for any damages to Plaintiff.

Defendants also contend that the amendments are unfair and prejudicial as Defendants would be required to engage in additional motion practice and defend against more claims at trial.

However, any amendments that add new claims have the potential to create this type of prejudice. This not unfair or undue prejudice, but rather the normal and expected consequence of having additional claims asserted against a party.

In any case, Defendants have not presented any evidence that the proposed amendments would unfairly increase the costs of discovery or trial preparation upon them.

Finally, Plaintiff has complied with the requirements of California Rules of Court, rule 3.1324 governing the requirements of a motion for leave to amend.

Therefore, the court will grant the motion for leave to file an amended complaint.

Motion to Seal

Defendant Inari Medical, Inc.’s Motion to Seal Portions of Plaintiff Biotronik, Inc.’s Motion for Leave to File Amended Complaint is DENIED without prejudice.

Pending Motion

Defendant Inari Medical, Inc. (Defendant Inari) moves to seal Exhibit 3 to the Declaration of Andrew J. Pieper filed in Support of Plaintiff Biotronik, Inc.’s Motion for Leave to File Amended Complaint.

Standard for Motion to Seal

“Unless confidentiality is required by law, court records are presumed to be open.” (Cal. Rules of Court, rule 2.550(c); see In re Marriage of Tamir

(2021) 72 Cal.App.5th 1068, 1078 [public’s right of access to court records is based on both common law right of access to public documents, as well as constitutional right grounded in the First Amendment].)

To seal a record, the moving party must file a motion for such relief, along with a memorandum and a declaration containing facts sufficient to justify the sealing. (Cal. Rules of Court, Rule 2.551, subd. (b)(1).) The motion must be served on all parties, and unless the court orders otherwise, a complete copy of the document must be served on all other parties that already possess copies, along with the redacted version. (Cal. Rules of Court, Rule 2.551, subd. (b)(2).)

To grant a motion to seal, the court must expressly find that:

1. an overriding interest exists that overcomes the right of public access to the record; 2. the overriding interest supports sealing the records; 3. a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; 4. the proposed sealing is narrowly tailored; and 5. no less restrictive means exist to achieve the overriding interest.

(Cal. Rules of Court, Rule 2.550, subd. (d); McGuan v. Endovascular Technologies, Inc. (2010) 182 Cal.App.4th 974, 988.)

Examples of documents that may qualify to be sealed are:

• Documents containing trade secrets, (see In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 300; McGuan v. Endovascular Tech., Inc., supra, 182 Cal.App.4th at p. 988 [business’ quality control records and complaint handling procedures may be sealed]); • Documents containing material protected by a privilege, (see Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 108 [documents protected by attorney-client privilege may be sealed]); • Confidential settlement agreement, (see Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283).

Here, Defendant Inari contends that the document to be sealed “contains sensitive and proprietary business information including the identification of industry contacts and information about Inari’s products and procedures.” (Def. Inari’s Mot to Seal Portions of Pltf.’s Mot. for Leave to File Amend. Compl., Mem. P.s&A.s (Mem. P.s&A.s at p. 1:9-11.)

However, Defendant Inari provides no evidence of this or even explanation as to portions of the document constitute sensitive and proprietary business information.

Defendant Inari only submits the declaration of its counsel, who states that Defendant Inari designated the document as confidential pursuant to a stipulated protective order and that “[i]t is my understanding that

under the terms of the Protective Order, the parties have agreed that the document may be sealed, and the exhibit redacted pending a ruling on the motion to seal.” (Decl. of Sierra Chinn-Liu in Supp. of Def. Inari’s Mot to Seal Portions of Pltf.’s Mot. for Leave to File Amend. Compl., ¶ 3.)

Defendant Inari argues that:

[The document] has been designated by Inari as “Confidential” or “Highly Confidential – Attorneys’ Eyes Only” under the parties’ Stipulated Protective Order, which has been entered by the Court. The parties have agreed that material so designated may be filed under seal (e.g., para. 18).

(Mem. P.s &A.s at p. 1:11-14.)

However, an agreement that a document may be filed conditionally under seal pending a court ruling does not mean the court must or should ultimately grant the motion to seal.

In addition, an agreement between the parties “alone is insufficient to constitute an overriding interest to justify sealing.” (McNair v. National Collegiate Athletic Assn. (2015) 234 Cal.App.4th 25, 35–36.)

The Rules of Court are clear that “[t]he court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).)

Instead, the court must consider the interests of the public and the interests served by having an open legal system. Thus, the court must require a specific showing that serious injury will occur absent a sealing order. (See McNair v. National Collegiate Athletic Assn., supra, 234 Cal.App.4th at p. 35.)

Here, Defendant Inari has made no such showing.

The court will deny the motion to seal.

Plaintiff shall give notice of these rulings.

8 Moyer vs. Motion to Enforce Settlement Norm Reeves, Inc. Plaintiff Richard Moyer Jr.’s Motion to Enforce Settlement Pursuant to CCP § 664.6 is DENIED.

30-2020- Pending Motion 01128340 Plaintiff Richard Moyer Jr. moves for an order enforcing the settlement between Plaintiff and Defendants Irvine Auto Retail, Inc. dba Norm Reeves Honda Superstore Irvine and Chad Lemieux.

Standard for Enforcement of Settlement Agreement