Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_04-cv-02562/USCOURTS-casd-3_04-cv-02562-2/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 1 - 04cv2562

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ELDORADO STONE, LLC; ELDORADO

STONE OPERATIONS, LLC,

Plaintiffs,

CASE NO. 04cv2562 JM(CAB)

ORDER GRANTING MOTION FOR

CLARIFICATION; GRANTING 

LEAVE TO AMEND TO ALLEGE

CIVIL EXTORTION CLAIM 

vs.

RENAISSANCE STONE, INC; ALFONSO

ALVAREZ; JOSE GALVEZ MARTINEZ;

JOSEPH SMITH; ROB HABER; and ORCO

CONSTRUCTION SUPPLY,

Defendants. ____________________________________

AND RELATED COUNTERCLAIMS

Defendants and Counterclaimants Renaissance Stone, Inc., (“Renaissance”), Joseph Smith,

Rob Hagar, and Alfonso Alvarez (collectively “Counterclaimants”) move ex parte for clarification

of this court’s August 14, 2006 Order Denying Leave to Amend to Assert Wage-Related Claims

(“Order”). As the Order did not address the civil extortion claim, Counterclaimants seek a ruling on

whether leave to amend to allege this claim has been granted. Plaintiffs Eldorado Stone, LLC and

Eldorado Stone Operations, LLC (collectively “Eldorado”) do not oppose the motion for clarification

of the Order but argue that leave to amend should be denied. For the reasons set forth below, the court

grants Counterclaimants ten days leave to amend from the date of entry of this order.

Counterclaimants’ claim for civil extortion arises from allegations that Eldorado wrongfully

threatened criminal prosecution of Alfonso Alvarez. (Proposed Third Amended Counterclaim ¶105).

Case 3:04-cv-02562-JM-CAB Document 190 Filed 11/14/06 Page 1 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 - 04cv2562

Although not identified in the proposed counterclaim, Counterclaimants assert that during the course

of settlement conversations Eldorado’s president repeatedly threatened a principal of Renaissance that

he would have Mr. Alvarez criminally prosecuted if the case did not settle. (Sopori Decl. ¶7). In

support of this claim, Counterclaimants also submit a follow-up e-mail sent by the Renaissance

principal that “Eldorado will not seek prosecution of Mr. Alvarez for any alleged theft of trade

secrets” as part of the proposed settlement. (Sopori Decl., Exh. D). Counterclaimants conclude that

such conduct constitutes civil extortion.

The threshold issue raised by Eldorado is whether the statement, made in the context of global

settlement discussions, is protected by the litigation privilege of Civil Code §47(b). The litigation

privilege applies to any communication “(1) made in judicial or quasi-judicial proceedings; 2) by

litigants or other participants authorized by law; 3) to achieve the objects of the litigation; and 4) have

some connection or logical relation to the action.” Silberg v. Anderson, 50 Cal.3d 205, 212 (1990).

The purpose of the privilege is to protect free access to the courts without the “threat of, and

harassment by, derivative litigation” and to “avoid an unending roundelay of litigation derived from

prior litigation.” Sacramental Brewing Co. v. Desmond, Miller & Desmond, 75 Cal.App.4th 1082,

1091 (1975). More importantly, “communications made in connection with litigation do not

necessarily fall outside the privilege merely because they are, or are alleged to be, fraudulent,

perjurious, unethical, or even illegal assuming they are logically related to litigation.” Blanchard v.

DirecTV, Inc., 123 Cal.App.4th 903, 921 (2004), The privilege applies without regard to “motives,

morals, ethics, or intent.” Silberg, 50 Cal.3d at 220.

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

/ / / 

Case 3:04-cv-02562-JM-CAB Document 190 Filed 11/14/06 Page 2 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 - 04cv2562

Here, the alleged statement facially appears to fall within the scope of Civil Code §47(b).

However, the arguments raised by the parties present evidentiary issues which are inappropriately

addressed on this pleading motion. In light of Fed.R.Civ.P 15's mandate that leave to amend is to be

freely given, the court grants Counterclaimants leave to amend. The court notes that the arguments

of Eldorado are more appropriately addressed on an evidentiary-based motion, and not at the pleading

stage. Counterclaimants are granted ten days leave to amend from the date of entry of this order.

IT IS SO ORDERED.

DATED: November 14, 2006

 Hon. Jeffrey T. Miller

 United States District Judge

cc: All Parties 

Case 3:04-cv-02562-JM-CAB Document 190 Filed 11/14/06 Page 3 of 3