Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-04078/USCOURTS-cand-5_14-cv-04078-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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Case No. 5:14-04078-LHK

ORDER DENYING MOTION FOR PROTECTIVE ORDER

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION

HUNTERHEART INC.,

 Plaintiff,

 v. 

BIO-REFERENCE LABORATORIES, INC., 

 Defendants. 

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Case No. 5:14-cv-04078-LHK

ORDER DENYING MOTION FOR 

PROTECTIVE ORDER

(Re: Docket No. 59) 

Plaintiff HunterHeart Inc. signed a contract that in no uncertain terms sold all its electronic 

files on its servers to Defendant Bio-Reference Laboratories, Inc. HunterHeart also elected to send 

other email using those servers even after the sale was complete and after it confirmed that BRLI 

controlled access to the servers. HunterHeart nevertheless now seeks a protective order restricting 

BRLI from reviewing certain of those files—emails between HunterHeart CEO Chris Riedel and 

HunterHeart’s attorneys—that are stored on the servers now belonging to BRLI. HunterHeart also 

asks the court to order BRLI to return these emails. The court DENIES HunterHeart’s motion. 

I.

In 2003, Riedel and his wife Marcia founded Hunter Laboratories, a clinical laboratory 

testing business.1 On August 7, 2013, Hunter and BRLI entered into an Asset Purchase Agreement 

 

1 See Docket No. 59-2 at ¶ 2. 

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Case No. 5:14-04078-LHK

ORDER DENYING MOTION FOR PROTECTIVE ORDER

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by which BRLI bought Hunter’s clinical testing laboratory and the bulk of its assets.2 Among 

these assets, and explicitly identified in the APA, were all of Hunter’s “computer equipment”; “all 

electronic files, codes, and software stored on said computer equipment”; Hunter’s “e-mail 

addresses” and “other records, data and communications . . . in the cloud.”3 The APA enumerated 

the email addresses that BRLI had purchased, one of which was Chris Riedel’s Hunter email 

address, “criedel@hunterlabs.com.”4 The agreement permitted Riedel “to have access” to this 

email address for one year after the closing date.5 The APA excluded, however, the HunterHeart 

program, a panel of tests and associated protocols to prevent and manage cardiovascular disease.6 

Hunter renamed itself HunterHeart Inc. and continued to offer the HunterHeart program.7

Riedel had used his Hunter email address to communicate with counsel before the sale. 

Even afterwards, although Hunter had sold BRLI the email address and the server on which the 

emails were stored, Riedel continued to use that email address to communicate with HunterHeart 

counsel. In February 2014, Riedel temporarily lost access to that email account during a server 

migration and asked BRLI, through counsel, to restore it.

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 Regardless, Riedel says he never 

considered the possibility that BRLI could access these communications,9 and neither he nor 

HunterHeart tried to delete or retrieve them. In August 2014, around the time that Riedel lost the 

right to use the email account under the APA, HunterHeart brought the present suit against BRLI.10

 

2 See id. at ¶ 3. 

3 See Docket No. 62-3 at § 1.1(a). 

4 See Docket No. 62-5. 

5 See Docket No. 62-3 at § 8.2(a). 

6 See Docket No. 59-2 at ¶¶ 2-3. 

7 See id. at ¶ 3. 

8 See Docket No. 62-6. 

9 See Docket No. 59-2 at ¶ 5; Docket No. 62-4. 

10 See Docket No. 2-1. 

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Case No. 5:14-04078-LHK

ORDER DENYING MOTION FOR PROTECTIVE ORDER

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In July 2015, in the course of responding to HunterHeart’s discovery requests for Riedel’s 

emails, BRLI’s counsel came across various messages between Riedel and HunterHeart’s 

counsel.11 BRLI’s counsel segregated the emails and notified HunterHeart’s counsel that it had 

them.12

II.

This court has jurisdiction under 28 U.S.C. § 1332. The undersigned was assigned 

discovery matters in this case pursuant to Fed. R. Civ. P. 72(a).

III.

The attorney-client privilege protects from disclosure confidential communications between 

a client and an attorney.13 “[It] is intended ‘to encourage clients to make full disclosure to their 

attorneys,’ recognizing that sound advice ‘depends upon the lawyer’s being fully informed by the 

client.”14 “Because it impedes full and free discovery of the truth, the attorney-client privilege is 

strictly construed.”15 A party waives the attorney-client privilege by tendering voluntarily the 

contents of a confidential communication.16 The party asserting the attorney-client privilege bears 

the burden of showing that it applies.17 That party also must prove that the privilege has not been 

waived.18 The “bare assertion that [a party] did not subjectively intend to waive the privilege is 

insufficient to make out the necessary element of nonwaiver.”19 Measured against these standards, 

HunterHeart’s request is unwarranted. 

 

11 See Docket No. 62-1 at ¶ 18. 

12 See id. at ¶ 20. 

13 See Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010). 

14 Id.

15 Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981). 

16 See id.

17 See id. at 25. 

18 See id.

19 Id.

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First, HunterHeart has not met its burden of proving that the attorney-client privilege 

protects Riedel’s communications with counsel before the APA was executed. At the time Riedel 

made these communications, the attorney-client privilege did attach. Hunter waived that privilege, 

however, when it agreed to hand over all of its servers, files and communications. HunterHeart 

argues that California law, which applies in this diversity case,

20 defines waiver as an “intentional 

relinquishment of a known right.”21 But that is exactly what Hunter did when it executed the 

APA—it intentionally relinquished its ownership right over all of its communications, and it 

received consideration in exchange. It is immaterial whether Riedel subjectively anticipated the 

disclosure of privileged emails. He and Hunter were sophisticated entities who negotiated the APA 

over the course of several months,22 and they came to an express agreement to hand over all the 

communications relevant here. And not until two years after the sale did HunterHeart or Riedel try 

to remove or retrieve these purportedly privileged communications. 

Even if Hunter had not waived its privilege in the APA by express transfer of the disputed 

communications, it passed from Hunter to BRLI by virtue of the APA’s transfer of the other 

company assets. BRLI cites the instructive case City of Rialto v. U.S. Dep’t of Def., where the 

court held that a purchaser acquiring “substantially all” of a company’s assets also acquired the 

company’s attorney-client privilege.23 Unlike the purchaser in City of Rialto, BRLI did not 

purchase literally all of Hunter’s assets—HunterHeart reserved a portion of the business in the 

form of the HunterHeart program. But the burden of preserving the privilege lies with 

HunterHeart, and HunterHeart offers insufficient evidence that its sale of all of its tangible assets 

and nearly all of its intangible ones constituted less than a sale of substantially all of them.

 

20 See Fed. R. Evid. 501. 

21 Wells Fargo Bank v. Superior Court, 990 P.2d 591, 597 (Cal. 2000) (quoting BP Alaska 

Exploration, Inc. v. Superior Court, 199 Cal. App. 3d 1240, 1252 (1988)). 

22 See Docket No. 62-1 at ¶¶ 3-5. 

23 492 F. Supp. 2d 1193, 1201 (C.D. Cal. 2007); see also Am. Int’l Specialty Lines Ins. Co. v. NWII, Inc., 240 F.R.D. 401, 406 (N.D. Ill. 2007) (“[S]everal courts have recognized that assignees or 

transferees of most, if not all, of a corporation’s assets will have the authority to assert or waive the 

attorney-client privilege.”).

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