Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-04496/USCOURTS-cand-5_03-cv-04496-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1391 Personal Injury

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 The Court’s Order of April 29, 2005 (“April 29 Order”), setting a briefing schedule on

the motion for reconsideration, stated that the motion would be taken under submission without

oral argument. Due to a clerical error, the motion was listed on the Court’s law and motion

hearing calendar for June 10, 2005. There were no appearances.

Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

**E-Filed 6/14/05**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ADVANTACARE HEALTH PARTNERS, LP, et

al.,

 Plaintiffs,

 v.

ACCESS IV, INC., a California Corporation, et al.,

 Defendants.

Case Number C-03-4496-JF (HRL)

ORDER DENYING DEFENDANT

PORTER’S MOTION FOR

RECONSIDERATION

Defendant Gwen Porter seeks reconsideration of the Court’s Order of March 17, 2005,

imposing default judgment against her and the other defendants in this case. The Court has

considered the moving and opposing papers. For the reasons discussed below, the motion will be

denied.1

I. BACKGROUND

Case 5:03-cv-04496-JF Document 152 Filed 06/14/05 Page 1 of 7
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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

Plaintiffs AdvantaCare Health Partners, LP and Healthcare Pathways Management, Inc.

(collectively “AdvantaCare”) are in the business of providing in-home intravenous services in

Monterey, Santa Cruz, San Benito and Santa Clara Counties. AdvantaCare obtains customers

through referrals from hospital discharge planners, home health agencies and doctors.

Two of AdvantaCare’s key employees, Gwen Porter (“Porter”) and Gary Dangerfield

(“Dangerfield”), resigned in August 2003 but continued working at AdvantaCare until early

September 2003. Porter and Dangerfield then began a new business, Access IV, Inc. (“Access

IV”), that competes directly with AdvantaCare. AdvantaCare discovered that Dangerfield had

copied numerous computer files prior to leaving AdvantaCare, and that he had tried to conceal

his copying activities by deleting copied files from his hard drive.

AdvantaCare filed the instant action on October 6, 2003, alleging claims for relief against

Porter, Dangerfield and Access IV for: (1) violation of the Federal Computer Fraud And Abuse

Act; (2) violation of California Penal Code § 502; (3) breach of contract; (4) breach of fiduciary

duty and duty of loyalty; (5) interference with prospective economic advantage; (6) violation of

the Uniform Trade Secrets Act; (7) violation of California’s Unfair Competition Law; and (8)

conversion. AdvantaCare also moved for a temporary restraining order (“TRO”) and a

preliminary injunction. The Court granted the application for TRO on October 6, 2003 and

granted the motion for preliminary injunction in part later the same month.

On August 17, 2004, the Court issued an order (“August 17 Order”) imposing $20,000 in

monetary sanctions against Defendants. The Court also imposed evidence sanctions, directing

the trier of fact to find that Defendants copied all of the files on AdvantaCare’s computers. The

Court’s imposition of these significant sanctions was based upon its factual determination that

immediately after service of the TRO, Dangerfield deleted thousands of files from his home and

office computers in an attempt to destroy evidence that Defendants were in possession of

AdvantaCare’s proprietary and confidential information. August 17 Order at 3. The Court also

found that Defendants failed to comply with the preliminary injunction, which required them to

return all material owned by AdvantaCare. Id. at 4. The parties thereafter agreed that

Defendants would delete all of AdvantaCare’s data from its computers and that AdvantaCare

Case 5:03-cv-04496-JF Document 152 Filed 06/14/05 Page 2 of 7
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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

would image Defendants’ hard drives to ensure compliance. Id. However, when AdvantaCare

imaged the hard drives, it discovered thousands of files containing its confidential, proprietary

information. Id. 

The Court found Defendants’ conduct to be egregious, willful and in bad faith. August

17 Order at 8-9. The Court expressly considered imposing terminating sanctions, but after

careful consideration concluded that significant monetary and evidence sanctions should be

sufficient to deter future misconduct by Defendants and to remedy most of the harm Defendants’

conduct had caused to AdvantaCare. Significantly for present purposes, the Court ordered

Defendants to demonstrate affirmative compliance with the preliminary injunction by

demonstrating that all files containing AdvantaCare’s proprietary information had been deleted. 

Id. at 13. It further directed the parties to meet and confer to determine which files remained to

be deleted. Id. The Court further directed that within a reasonable time thereafter, AdvantaCare

was to examine Defendants’ hard drives to confirm that all files containing AdvantaCare’s

proprietary information had been deleted. Id. The Court expressly warned that “Defendants’

failure to delete the files will result in default judgment against Defendants.” Id.

On September 30, 2004, the Court approved the parties’ stipulation regarding the manner

in which Defendants would demonstrate compliance with the preliminary injunction and August

17 Order. The stipulation and order provided that: (1) Access IV would copy all files on its

computers to eleven compact disks; (2) Access IV would remove the hard drives from its six

existing computers and send them to its counsel, Gregory J. Charles, Esq. (“Charles”), to hold

throughout the proceedings; (3) Charles would retain a seventh hard drive previously removed

from Dangerfield’s home computer; (4) Access IV would replace the six hard drives that had

been removed with new hard drives; (5) Access IV would load the data from the eleven compact

disks onto a new file server; (6) Access IV’s computers and hard drives and the eleven compact

disks would be made available for inspection by AdvantaCare’s forensic expert; (7) Charles

would maintain in a secure room the original seven hard drives, and neither the hard drives nor

their contents would be released absent a stipulation between the parties or by court order; and

(8) at the conclusion of the case, the seven hard drives would be destroyed. 

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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

On March 17, 2005, the Court issued an order (“March 17 Order”) striking Defendants’

answer and entering default judgment against them. The Court’s decision to enter terminating

sanctions was based upon its factual determination that while AdvantaCare’s previous motion for

sanctions was under submission, Defendants returned two hard drives to the leasing company,

and those hard drives were wiped clean, and that even after the Court issued its August 17 Order

imposing monetary and evidence sanctions, numerous files were deleted from Access IV’s new

servers and from Dangerfield’s new hard drive, and several compact disks were burned on

Dangerfield’s hard drive. March 17 Order at 10. In addition to Defendants’ continued

destruction of evidence, Defendants failed to remove all of AdvantaCare’s proprietary materials

from their computers. A number of AdvantaCare files were loaded onto Defendants’ computers

after September 1, 2004, apparently from alternative data sources not provided to AdvantaCare. 

Id. at 11. Defendants offered various explanations for the presence of AdvantaCare material on

their computers, to which the Court responded as follows:

However, despite their attempts to explain their most recent conduct, Defendants

do not deny possessing AdvantaCare files long after such possession could be

explained legitimately. Defendants have known for months that in light of their

past behavior, any possession of AdvantaCare files would be deemed a material

violation of the Court’s orders. Nor is there any indication that Access IV has

returned any of the hard copies of AdvantaCare documents that may be in its

possession. Particularly in view of the fact that they were warned specifically that

any further misconduct would result in terminating sanctions, Defendants’

conduct is inexcusable.

March 17 Order at 12.

II. DISCUSSION

In order to obtain reconsideration of the March 17 Order, Porter must demonstrate:

 (1) That at the time of the motion for leave, a material difference in fact or law

exists from that which was presented to the Court before entry of the interlocutory

order for which reconsideration is sought. The party also must show that in the

exercise of reasonable diligence the party applying for reconsideration did not

know such fact or law at the time of the interlocutory order; or

(2) The emergence of new material facts or a change of law occurring after the

time of such order; or

(3) A manifest failure by the Court to consider material facts or dispositive legal

arguments which were presented to the Court before such interlocutory order.

Civ. L. R. 7-9(b). Porter does not argue that new or different facts or law warrant reconsideration

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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

under (1) or (2) above; rather, she appears to be arguing that the Court failed to consider material

facts when the Court imposed terminating sanctions against her.

Specifically, Porter argues that the Court should not have entered default judgment

against her because the Court has never made any findings that she personally engaged in any of

the copying or destruction of files described in the Court’s orders. While Porter is correct that

the Court’s orders have focused largely upon the affirmative misconduct of Dangerfield, the

March 17 Order explicitly placed upon all Defendants an affirmative obligation to remove

AdvantaCare materials from their computers and warned that all Defendants would be defaulted

absent compliance. Porter apparently left compliance in Dangerfield’s hands. The fact that

Porter reposed trust in Dangerfield does not insulate her from the affirmative obligations placed

upon all Defendants in the March 17 Order, especially in light of the Court’s repeated findings

that Dangerfield has engaged in misconduct with respect to AdvantaCare’s files throughout this

litigation. 

Moreover, Porter’s attempts to distance herself from Dangerfield at this point in the

proceedings - after terminating sanctions have been imposed - lack credibility. This is the first

time Porter has suggested that she did not authorize or acquiesce in Dangerfield’s conduct. 

Porter has had numerous opportunities to distinguish her conduct from Dangerfield’s, and she

could have done so in any number of ways, including filing an affidavit disavowing any

knowledge of Dangerfield’s misconduct and detailing what efforts, if any, she personally

undertook to comply with the preliminary injunction and August 17 Order. She never did so.

Accordingly, Porter’s motion for reconsideration will be denied and default judgment will

be entered against all Defendants.

//

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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

III. ORDER

(1) Porter’s motion for reconsideration is DENIED; and

(2) Default judgment shall be entered against all Defendants.

DATED: June 14, 2005

/s/ electronic signature authorized

JEREMY FOGEL

United States District Judge

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Case No. C- 03-4496-JF (HRL)

ORDER DENYING MOTION FOR RECONSIDERATION

(JFLC2)

Copies of this Order served upon:

Gail Melissa Blanchard-Saiger invalidaddress@myrealbox.com, wdelvalle@foley.com

Gregory J. Charles gjc@svlg.com, mwo@svlg.com;keb@svlg.com

Kimberly K. Dodd kdodd@foley.com, llow@foley.com

Nancy J. Geenen ngeenen@foleylaw.com, rbarcena@foleylaw.com

Kalpana V. Peddibhotla kvp@svlg.com, 

Case 5:03-cv-04496-JF Document 152 Filed 06/14/05 Page 7 of 7