Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-00761/USCOURTS-caed-1_06-cv-00761-3/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Tort/Non-Motor Vehicle

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SHC SERVICES, INC, )

)

)

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Plaintiff, )

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v. )

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ALL HEALTH SERVICES, et al., )

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)

)

Defendants. )

 )

1:06cv0761 AWI DLB

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S MOTION

TO COMPEL

(Documents73, 74, 75, 76, 77, 78, 79 and 80)

Plaintiff SHC Services, Inc. (“SHC”) filed the instant motions to compel further

responses to special interrogatories and production of documents on December 22, 2006. SHC

filed eight motions total: four separate motions against each Defendant seeking further responses

to the first set of requests for production of documents, and four separate motions against each

Defendant seeking further responses to special interrogatories. The motions were heard on

January 19, 2007, before the Honorable Dennis L. Beck, United States Magistrate Judge. Shawn

Larsen appeared on behalf of SHC. Gordon Park appeared on behalf of Defendants.

BACKGROUND

This is an action by SHC against three former employees- Defendants Robert Garcia

(“Garcia”), Nadine Perez-Turrietta (“Perez-Turrietta”) and Deborah Mackey (“Mackey”)

(collectively the “Individual Defendants”), and their new employer, Defendant All Health

Services Corporation (“All Health”). All three Individual Defendants left the employ of SHC on

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or about June 9, 2006, or June 12, 2006. SHC and All Health are direct competitors in the

temporary medical staffing industry. Both companies, or “registries,” provide registered nurses,

licensed vocational nurses and other medical services personnel to public and private entities. 

SHC alleges that Defendants have colluded to misappropriate SHC’s confidential and proprietary

employee and customer information in hopes of gaining an unfair business advantage. 

SHC filed the instant action on June 15, 2006, pursuant to this Court’s diversity

jurisdiction. The Complaint alleges causes of action for (1) conversion; (2) breach of contract;

(3) intentional interference with contractual relations; (4) intentional interference with

prospective business advantage; (5) trade secret misappropriation; (6) breach of confidence; (7)

trade libel; (8) defamation; (9) unfair competition; (10) unjust enrichment; and (11) accounting. 

SHC seeks damages and injunctive relief. 

Defendants filed their answer on July 6, 2006. 

On August 1, 2006, the Honorable District Judge Anthony W. Ishii entered an order

denying SHC’s motion for a temporary restraining order. 

On September 18, 2006, the Court entered a Scheduling Conference Order setting the

discovery cutoff for May 7, 2007, the dispositive motion deadline for June 1, 2007, and a jury

trial for October 2, 2007.

LEGAL STANDARD

Federal Rule of Civil Procedure 26(b)(1) provides that a party “may obtain discovery

regarding any matter, not privileged, that is relevant to the claim or defense of any party,

including the existence, description, nature, custody, condition, and location of any books,

documents, or other tangible things and the identity and location of persons having knowledge of

any discoverable matter.” 

FIRST SET OF SPECIAL INTERROGATORIES

SHC seeks to compel responses in three general categories (covering Interrogatories

Numbers 3-6, 7-10 and 13-14) from All Health. SHC also seeks to compel responses in four

general categories (covering Interrogatories Numbers 1-5, 7-8) from each Individual Defendant. 

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For purposes of this motion, the discovery at issue is broken down as (1) discovery addressed to

All Health; and (2) discovery addressed to the Individual Defendants. 

A. All Health’s Responses to Interrogatories

1. Numbers 3-6: All Health’s Contact with SHC’s Current and Former Employees

About Employment with All Health

Interrogatories Numbers 3-6 seek information about communications All Health had with

current and former employees of SHC, as well as each Individual Defendant prior to their

resignation, about employment with All Health. 

The Interrogatories define “identify” as (i) the date of the communication; (ii) the

person(s) participating in, or party to, the communications; (iii) the substance of the

communications; and (iv) whether the communication was written, oral or otherwise.

A review of All Health’s responses reveals that it has not provided the substance of the

communications identified. In fact, it provided no response at all to Number 3. During the

hearing, the parties agreed that Numbers 4-6, pertaining to the Individual Defendants, were moot

because SHC has taken the depositions of the Individual Defendant and acquired the requested

information.

As to Number 3, All Health agreed to provide a supplemental response. 

2. Numbers 7-10: All Health’s Temporary Medical Professional Employees

Currently Working with Any of SHC’s Four Largest Clients

In Interrogatories Numbers 7-10, SHC seeks identification of All Health employees who

have worked at various correctional facilities since June 9, 2006. All Health stated numerous

objections but did not provide any substantive responses.

All Health’s primary objection is that the questions violate both its privacy rights and the

privacy rights of third party individuals. All Health argues that because of the nature of the

competition between All Health and SHC, i.e., nurses often go back and forth between

companies, divulging the identities, etc. of the All Health employees would give SHC an unfair

competitive advantage through possible recruitment opportunities. 

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Assuming All Health can assert a privacy right, the right does not outweigh SHC’s need

for the information. Such information will assist SHC in determining whether any recruitment

occurred. 

Pursuant to the discussion at the hearing, All Health’s employees who have worked at the

specified institutions can be divided into three categories: (1) longstanding All Health employees

who were with All Health prior to June 9, 2006; (2) All Health employees who were previously

SHC employees (the group at issue); and (3) All Health employees who did not work for SHC,

but did not work for All Health prior to June 9, 2006.

At the hearing, the parties agreed to the following resolution: For the time period June 9,

2006 through January 1, 2007, All Health will identify employees in all three categories. The

employees in category two are free to be deposed. The employees in categories 1 and 3,

however, shall not be deposed until All Health’s counsel has had an opportunity to object.

3. Numbers 13-14: Persons All Health Currently Employs From Its Hanford Office

Interrogatories Numbers 13 and 14 seek information regarding the employees in All

Health’s Hanford office. Number 13 seeks information about all employees working in All

Health’s office, and All Health has agreed to provide the information. 

Number 14 seeks information about the medical professional employees that work out of

All Health’s Hanford office. While such information is relevant to explore recruitment, it is not

necessary to provide all of the information required by the definition of “identify.” Therefore,

All Health shall provide only the names and professions of the employees responsive to this

request. 

B. Individual Defendants’ Responses to Interrogatories 

1. Resignation from SHC and Potential Employment with All Health (Numbers 1-3)

The parties agree that Numbers 1 through 3 are moot given Individual Defendant’s

depositions and All Health’s supplemental answers.

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2. Communications with Current or Former SHC Employees about All Health or,

Post-resignation, about SHC (Numbers 4-5)

The parties agree that Numbers 4 and 5 are also moot given Individual Defendant’s

depositions and All Health’s supplemental answers.

3. All Health Compensation (Number 7)

In Interrogatory Number 7, SHC seeks information about Individual Defendant’s various

forms of compensation with All Health. All Health’s main objections are based on Individual

Defendant’s privacy rights and relevancy.

The requested information is relevant because evidence of inflated compensation might

suggest that All Health believed these individuals to have extra value insofar as they could bring

SHC employees to their Hanford office. SHC is entitled to examine the evidence to determine if

this is a viable argument. 

In recognition of their privacy rights, Defendants have agreed to produce the information

pursuant to the attorneys’ eyes only provision of the September 19, 2006, Stipulated Protective

Order.

4. On-call Schedule While Employed with SHC (Number 8)

In the final interrogatory at issue, SHC seeks to discover the dates Individual Defendants

were on-call. While this seems to be information that SHC would have in its possession, SHC

explains that it also wants to determine if there were any dates that Individual Defendants

believed they were on-call, regardless of the schedule. During the hearing, the parties agreed to

the following resolution: SHC will provide relevant calendars/schedules for the period January 1,

2006, through June 9, 2006. Based on these calendars, Individual Defendants will (1) determine

whether the dates identified by the calendars/schedules are an accurate representation of the dates

they were on-call; and (2) identify any additional dates that they believed they were on-call that

are not reflected on the calendars/schedules.

REQUESTS FOR PRODUCTION OF DOCUMENTS

SHC seeks to compel further responses in two general categories (covering Request

Numbers 1,2,4-7, 10-14, 15-25, 27-30, 40-42, and 44-45) from All Health. SHC also seeks to

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compel responses in three general categories (covering Request Numbers 6, 14-16, 18-20, 29 and

30) from each Individual Defendant. As above, the discovery at issue is broken down as (1)

discovery addressed to All Health; and (2) discovery addressed to the Individual Defendants. 

A. All Health’s Responses to Requests for Production

1. Documents related to All Heath’s business decision to expand its business in

Hanford, California, a new territory and business conducted out of the

Hanford Sequoia Inn on June 13-14, 2006 (Request Nos. 1, 2, 4-7, 10-13, 14,

40-42);

At the hearing, the parties agreed that Request Numbers 1 and 3 are moot as All Health

produced its Articles of Incorporation, Bylaws and General Liability Policy. As to Request

Number 2, SHC’s request for “All Financial Documents” is overly broad. At the hearing, SHC

agreed to limit this request to documents filed by All Health with the California Department of

Corrections. With limitation, All Health is ordered to further respond to this request.

With regard to the Request Numbers 6-13, All Health represents that it has produced all

documents responsive to this request, despite its general objections. As discussed at the hearing,

this is the vice of using boilerplate general objections. The responses do not allow for

meaningful evaluation as neither the propounding party nor can the Court determine, with

certainty, the requests for which the responding party is withholding documents and on what

basis, and the requests for which it has no responsive documents. All Health is ordered to

provide supplemental responses to Request Numbers 6-13 and 40-43 clarifying for each that all

responsive documents have been produced and no documents are withheld based on an objection.

Request Number 14 seeks documents regarding All Health’s client services rendered by

the Hanford Office. While this request is also extremely broad, at the hearing, the parties agreed

that All Health would produce its staffing calenders for the Hanford Office, pursuant to the terms

of the Stipulated Protective Order. 

Request Numbers 40-42 seek All Health’s projections, budgets, economic forecasts,

profit/loss statements and similar financial documents for the years 2005 - 2009. The Court

agrees that some of the requested information is relevant to SHC’s claims that All Health relied

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on the fruits of SHC’s efforts to build its offices in Hanford. However, as drafted, the requests

are overly broad. Accordingly, Request Numbers 40-42 are limited to budgets and/or economic

forecasts for the years 2006 and 2007. As limited, All Health is ordered to respond. 

3. Documents related to the growing numbers of former SHC employees now working

at All Health (Request Nos. 15-25, 26-30, 38, 43-45).

Like Interrogatories 3-6 discussed above, Request Numbers 15-25 seek documents related

to communication between All Health and SHC’s former employees, including the Individual

Defendants. SHC also seeks documents related to their various forms of compensation with All

Health. All Health’s main objection to production is based on its privacy rights, the privacy

rights of the Individual Defendants and the privacy rights of third parties. Assuming All Health

can assert a privacy right, the right does not outweigh SHC’s need for the documents. 

Accordingly, consistent with the Court’s order to respond to the interrogatories, All Health shall

produced documents responsive to Request Numbers 15-25, pursuant to the attorneys eyes only

provision of the Stipulated Protective Order. However, as discussed at the hearing, with respect

to these requests, SHC is only entitled to documents regarding the terms of the various

employees’ employment and compensation, not the individuals’ specific performance. 

Request Numbers 26-28 seek documents evidencing All Health’s employment

procedures. All Health represents that all responsive documents have been produced and that no

documents have been withheld. All Health shall provide a supplemental response so clarifying.

Request Numbers 29 and 30 seek documents relating to All Health’s efforts and

procedures for obtaining “gate clearance” as required for their employees to work in the various

correctional facilities. At the hearing, SHC clarified that it was seeking documents evidencing

how long it takes their employees to obtain the necessary clearance. With this limitation, All

Health agreed to produce additional documents. 

Request Number 38 seeks documents evidencing marketing communication by All

Health with SHC’s former or present clients. When limited to documents evidencing All

Health’s offers to provide services or negotiations to provide services to SHC’s present and

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former clients, these documents are relevant to SHC’s claims. All Health is therefore ordered to

produce documents responsive to this request, as limited. 

All Health represents that it has produced all documents responsive to Request Numbers

43 - 44. All Health shall provide a supplemental response clarifying that documents have not

been withheld. 

At the hearing, the parties agreed that Request Number 45 is moot.

B. REQUESTS FOR PRODUCTION OF DOCUMENTS SERVED ON INDIVIDUAL 

DEFENDANTS

SHC’s requests to the Individual Defendants fall into two general categories (2)

categories:

1. Documents related to communications between the Individual Defendants and

SHC’s current or former employees and clients, including cellular telephone records

(Request Nos. 14, 16, 18, 29, 30).

These requests seek the Individual Defendants’ cellular telephone records from January 1,

2005 to the present. SHC contends these records are relevant to its claims that the Individual

Defendants directed their marketing efforts, coupled with direct recruitment, to SHC employees. 

The Individual Defendants object to production of these records based on their own privacy and

the privacy of third parties. As discussed at the hearing, defendants are in a better position to

review their cellular telephone bills and redact any information pertaining to personal calls. 

Accordingly, defendants shall respond to these requests by producing their cell phone bills for the

period January 2006 through June 30, 2006. Defendants may redact any information pertaining

to personal telephone calls.

2. Documents related to business conducted out of the Hanford Sequoia Inn on June

13-14, 2006 (Requests Nos. 15, 19, 20).

Defendants represent that notwithstanding their objections, there are no documents

responsive to these requests. Based on this representation, defendants shall provide a

supplemental response, clarifying that after a diligent search, they have determined that no

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responsive documents are in their possession, custody or control and that no documents have

been withheld.

SANCTIONS

The Court will address Plaintiff’s request for sanctions in a separate order.

CONCLUSION

Based on the foregoing, SHC’s motions to compel filed December 22, 2006 is granted in

part. On or before February 12, 2007, as detailed in this Order, defendants shall further respond

as follows:

1. All Health shall further respond to Interrogatory Numbers 3, 7-10, 13, 14;

2. The Individual Defendants shall further respond to Interrogatory Number 7 and 8;

3. All Health shall further respond to Request for Production of Documents

Numbers 2, 6-14, 15-25, 26-30, 38 and 40-44;

4. The Individual Defendants shall further respond to Request for Production of

Documents Numbers 14 -16, 18 -20 and 29, 30 

IT IS SO ORDERED. 

Dated: February 6, 2007 /s/ Dennis L. Beck 

3b142a UNITED STATES MAGISTRATE JUDGE

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