Court Opinion

ID: 4643326
Source: CourtListenerOpinion
Date Created: 2020-12-16 00:01:35.71976+00
Date Added: 2024-06-11T08:00:39.051361
License: Public Domain

Filed 12/15/20
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

 COAST HEMATOLOGY-                   B297984
 ONCOLOGY ASSOCIATES
 MEDICAL GROUP, INC., et al.,        (Los Angeles County
                                     Super. Ct. No. NC061009)
    Plaintiffs and Appellants,

        v.

 LONG BEACH MEMORIAL
 MEDICAL CENTER et al.,

    Defendants and Respondents.

      APPEAL from a judgment of the Superior Court of
Los Angeles County, Mark C. Kim, Judge. Affirmed in part and
reversed in part.
      Rutan & Tucker, Gerard Mooney and Proud
Usahacharoenporn for Plaintiffs and Appellants.
      Foley & Lardner, Tami S. Smason and Kathryn A.
Shoemaker for Defendants and Respondents.
                     ____________________
       The trial court granted summary judgment for the defense,
reasoning the plaintiff’s two purported trade secrets were not
secrets at all. The court was right about one secret but not the
other. The trial court also granted the defense’s request for relief
from the plaintiff’s claims for tortious interference and unfair
competition. We affirm the trial court rulings except as to the
one trade secret. We remand on this lone claim.
                                   I
       For years, one medical group negotiated to buy another.
Eventually the would-be buyer decided just to hire staff from the
would-be seller. The disappointed seller sued for
misappropriation of trade secrets and related torts.
       The would-be seller, now the plaintiff and appellant, is
Coast Hematology-Oncology Associates Medical Group, Inc.
Coast treats cancer and illnesses of the blood.
       Coast sued its would-be buyer: Long Beach Memorial
Medical Center.
       Memorial was planning a medical facility near Coast’s
location and inquired in 2011 about buying Coast’s entire practice
to help staff its new establishment. Coast and Memorial
negotiated for years but could not agree on price. Each side
blamed the other for being inflexible and unrealistic. Eventually
in 2016 Memorial hired some people working for Coast: two
physicians, Nilesh Vora and Milan Sheth, and four staff members
who were not physicians.
       Coast responded by suing Memorial, as well as Memorial’s
manager John Bishop. Coast also sued entities allied with
Memorial, as well as Dr. Vora. Coast now has settled with Vora,
who is not a party to this appeal. This disposed of the one claim
against Vora alone.

                                 2
       Coast’s four remaining claims were for misappropriation of
trade secrets, intentional interference with prospective economic
advantage, tortious interference with contract, and unfair
competition in violation of section 17200 of the Business and
Professions Code. Coast also sought punitive damages. We
recount the specifics of these claims in our analysis. Memorial
successfully moved for summary judgment against Coast. In the
alternative, Memorial sought summary adjudication of a range of
issues. Coast appealed.
                                    II
       We independently review summary judgment rulings.
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860.) A
defendant moving for summary judgment must show the plaintiff
cannot establish an element of its cause of action, or that a
complete defense destroys the cause. Summary judgment is
appropriate where there is no triable issue as to any material
fact. It is not a disfavored remedy. (Oh v. Teachers Ins. &
Annuity Assn. of America (2020) 53 Cal.App.5th 71, 81–82.) To
the contrary, summary judgment motions commonly benefit all
sides, no matter who wins: the process of summary judgment is
more economical than trial, and the ruling usually gives the
parties helpful information about the true value of the case,
which can facilitate settlement.
                                   III
       In the first count of its complaint, Coast sued Memorial for
stealing trade secrets.
                                    A
       The gist of a trade secret claim is (1) a valuable secret (2)
you have worked reasonably hard to keep secret (3) that someone
obtained through improper means. These elements spring from

                                 3
California’s version of the Uniform Trade Secret Act, which our
legislature adopted in 1984. (Civ. Code, § 3426–3426.11, added
by Stats. 1984, ch. 1724, § 1.)
       To paraphrase this dense Act, a trade secret is something
(1) having commercial value from not being generally known and
(2) that is the subject of reasonable secrecy measures. (See Civ.
Code, § 3426.1, subds. (d)(1) & (d)(2) [“(1) Derives independent
economic value, actual or potential, from not being generally
known to the public or to other persons who can obtain economic
value from its disclosure or use; and (2) Is the subject of efforts
that are reasonable under the circumstances to maintain its
secrecy.”].)
       One can violate this statute by using improper means to get
a trade secret. (See Civ. Code, §§ 3426.3, subd. (a) [“A
complainant may recover damages for the actual loss caused by
misappropriation.”], 3426.1, subd. (b) [“ ‘Misappropriation’
means: (1) Acquisition of a trade secret of another by a person
who knows or has reason to know that the trade secret was
acquired by improper means; or (2) Disclosure or use of a trade
secret of another without express or implied consent by a person
who: (A) Used improper means to acquire knowledge of the trade
secret; or (B) At the time of disclosure or use, knew or had reason
to know that his or her knowledge of the trade secret was: (i)
Derived from or through a person who had utilized improper
means to acquire it; (ii) Acquired under circumstances giving rise
to a duty to maintain its secrecy or limit its use; or (iii) Derived
from or through a person who owed a duty to the person seeking
relief to maintain its secrecy or limit its use; or (C) Before a
material change of his or her position, knew or had reason to
know that it was a trade secret and that knowledge of it had been

                                 4
acquired by accident or mistake.”], italics added; 3426.1, subd. (a)
[“ ‘Improper means’ includes theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to maintain secrecy,
or espionage through electronic or other means.”], italics added.)
                                   B
      Coast claimed two trade secrets relating to medical billing.
      One claimed secret is “CPT.” CPT is an acronym for
“Current Procedural Terminology.” This jargon concerns a
nationally uniform system of codes for medical billing: what the
doctor’s office puts on the form when billing for payment to an
insurance company, for instance, or to a government payor like
Medicare. As Memorial told the trial court, CPT codes are well-
known: “You can Google them and find them online.” If you do
that, a website will tell you, for example, CPT code 00811 is
defined throughout the industry as “Colonoscopy done for
diagnostic purposes.” (CIPROMS Medical Billing, Billing
Guidelines Vary for Anesthesia During Screening Colonoscopies
 [as of Dec. 7, 2020],
archived at < https://perma.cc/WX8L-EWYJ>.)
      To avoid jargon, we call this first alleged secret the
“medical codes secret.”
      The second disputed secret is “RVU,” which stands for
“Relative Value Unit.” This signifies a nationally uniform
quantitative scale that rates the difficulty of different medical
services. A heart transplant, for example, has a higher relative
value according to this scale than does an office visit, because the
transplant is more of a challenge than the visit. This scale also
can be used to measure physician productivity, because it can
measure a doctor’s output by a method more sophisticated than

                                 5
merely the number of hours spent or patients seen. A doctor who
performs two heart transplants a day, for example, has done
different work than one who accomplished two office visits in one
day, even if the two put in the same number of hours.
       We call this secret the “physician productivity secret.”
       Our analysis yields two conclusions.
       First, the supposed medical codes secret is out of the case.
A statute required Coast to identify its secrets with reasonable
particularity for the litigation, but Coast did not comply with the
statute. The trial court was right to dispose of this claim.
       Second, as to the physician productivity secret, Coast
succeeded in generating a genuine factual dispute here, meaning
summary judgment of this claim was wrong. We remand the case
for further proceedings on the physician productivity secret.
       We explain our conclusions.
                                   1
       We start with the medical codes secret. The trial court was
right to rule summarily for Memorial on this point because Coast
failed to identify this secret with reasonable particularity, as a
California statute requires.
       Code of Civil Procedure section 2019.210 is the governing
statute. It sets out the identification requirement Coast flunked.
This statute specifies that, before commencing discovery relating
to the trade secret, the party alleging the misappropriation must
“identify” the trade secret with “reasonable particularity.” (Ibid.,
italics added [“In any action alleging the misappropriation of a
trade secret under the Uniform Trade Secrets Act (Title 5
(commencing with Section 3426) of Part 1 of Division 4 of the
Civil Code), before commencing discovery relating to the trade
secret, the party alleging the misappropriation shall identify the

                                 6
trade secret with reasonable particularity subject to any orders
that may be appropriate under Section 3426.5 of the Civil
Code.”].)
       The penalty for failing to make this disclosure is loss of
trade secret protection. (Pixion, Inc. v. PlaceWare, Inc. (N.D.Cal.
2005) 421 F.Supp.2d 1233, 1240–1242 [applying state law].)
       The need for plaintiffs to identify their claimed secret with
reasonable particularity flows from the nature of trade secret
law. Trade secrets indeed are intellectual property, but of a
special sort. We explain.
       Fundamentally, any property right entitles the owner of the
property to exclude others. If you own some real property, for
instance, you can exclude trespassers from it, because that land
is exclusively yours. The same is true with a car, or a bicycle, or
any other piece of physical property. You can control what is
yours and so you can tell others whether, and how, they can use
your things. Property law will back you up if events force you to
court. (E.g., Ralphs Grocery Co. v. Victory Consultants, Inc.
(2017) 17 Cal.App.5th 245, 258 [the right to exclude is a
fundamental aspect of property ownership].)
       Physical property can be defined by its physical nature:
your car, my bicycle. Real property is the same, measured out in
metes and bounds: physical dimensions as measured by physical
tools.
       By contrast, intellectual property is intangible. One cannot
use a yardstick to measure the boundaries of inventions and
proprietary information. The law must define these intangible
boundaries in different ways, depending on the particular
intellectual property right at issue: patent, copyright,
trademark, or trade secret.

                                 7
       In patent law, the patent claims define what the patent
holder owns. The patent office approves and issues the patent.
The claims language in the patent is public, for all to see, spelling
out the patented invention. (See 35 U.S.C. § 112(b) [“The
specification shall conclude with one or more claims particularly
pointing out and distinctly claiming the subject matter which the
inventor or a joint inventor regards as the invention.”]; see
Markman v. Westview Instruments, Inc. (1996) 517 U.S. 370,
373.)
       In copyright law, the work of authorship fixed in a tangible
medium of expression defines the property you own. (17 U.S.C. §
102(a) [copyright protection subsists “in original works of
authorship fixed in any tangible medium of expression”].) When
Willa Cather published My Ántonia, for instance, her novel fixed
her work of authorship and marked out her copyright for the
world to inspect and admire. (Compare Nichols v. Universal
Pictures Corp. (2d Cir. 1930) 45 F.2d 119 (Hand, J.) [examining
work of authorship to define its precise property limit] and
Sheldon v. Metro-Goldwyn Pictures Corp. (2d Cir. 1936) 81 F.2d
49 (Hand, J.) [same].)
       Trademark law defines property limits by reference to the
designation of origin that the owner uses in commerce. (15
U.S.C. § 1125(a)(1) [people who, in connection with any goods or
services, use in commerce any word or symbol or “any false
designation of origin” likely to cause confusion are civilly liable].)
This approach guarantees public awareness of what the
intellectual property owns: the buying public learns to associate
trademarks like Clorox and Hilton Hotels with a particular origin
for the familiar goods or services. The public comes to rely on the
validity of the mark as an assurance of quality and consistency.

                                  8
A trademark must be used in commerce and thus known by the
purchasing public or it is not a trademark at all. (See, e.g., In re
Trade-Mark Cases (1879) 100 U.S. 82, 94; Matal v. Tam (2017)
__U.S.__, __ [137 S.Ct. 1744, 1751–1753].)
       Trade secrets are completely different. What are the
boundaries of what the trade secret owner owns? No physical
ruler can measure a secret in inches or yards. You cannot touch
a secret. Nor does some public document or public usage demark
the boundaries of the trade secret entitlement. Rather, putative
trade secret owners themselves spell out the boundaries of their
property claims, which they typically specify only in the course of
litigation.
       When you define the proposed boundaries of your own
property, and when exclusion is valuable, and when litigation is
intense, human nature prompts us to ask for more, not less, and
to ask for it in a vague and all-encompassing way. Propelled by
strong incentives, plaintiffs can write complaints in just that
style. Hence the need in trade secret litigation for plaintiffs at
some point to identify what they claim with reasonable
particularity. Until a plaintiff does so, the opposing party and
the court literally may not know what the plaintiff is talking
about. (Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc.
(2014) 226 Cal.App.4th 26, 43–44 (Altavion); IDX Systems Corp.
v. Epic Systems Corp. (7th Cir. 2002) 285 F.3d 581, 583 [“unless
the plaintiff engages in a serious effort to pin down the secrets a
court cannot do its job”] (IDX).)
       A California statute lays down when and how this is to
happen. Before commencing discovery relating to trade secrets,
the party alleging the misappropriation must “identify” trade
secrets with “reasonable particularity.” (Code Civ. Proc., §

                                 9
2019.210, italics added.) This statute merely formalizes a
generally necessary step in trade secret litigation. (See IDX,
supra, 285 F.3d at p. 583; 4 Milgrim on Trade Secrets (2000) §
14.02.01[b].)
       In this court, Coast admits it did not list its medical codes
as secret in its section 2019.210 designation.
       In the trial court, Coast designated nine purported secrets,
and none was about medical codes:
       “1. Plaintiff’s RVU summaries
       “2. Plaintiff’s financial statements
       “3. Plaintiff’s infusion services data
       “4. Plaintiff’s payer mix data
       “5. Plaintiff’s staff salary information
       “6. Plaintiff’s bank statements
       “7. Plaintiff’s income statements
       “8. Plaintiff’s balance sheets and reconciliations
       “9. Plaintiff’s drug inventories.”
       Coast wisely abandons its effort, which it pursued in the
trial court, of trying to shoehorn this medical codes secret into
these nine inapplicable general categories.
       This would seem to end the matter in Memorial’s favor, as
a matter of law. It was proper for the trial court summarily to
adjudicate this question of law.
       Coast, however, seeks to avoid this conclusion by making
this argument: that it “requested leave from the trial court in its
summary judgment papers to amend its trade secret designation
to add the [medical codes] methodology, to the extent necessary.”
(Italics added.) Coast points to a single sentence it wrote on page
18 of its opposition to Memorial’s summary judgment motion:
“Therefore, even if the Court somehow finds that [Coast’s]

                                 10
designation does not cover any of the subject trade secrets, there
is good cause to allow [Coast] to amend its designation.” This
sentence followed Coast’s comment that it could not identify this
secret earlier because it had not received pertinent discovery
from Memorial until recently.
        Two independent reasons invalidate Coast’s argument.
First, Coast’s one sentence was too late. Second, this one
sentence was not a motion for leave to amend its trade secret
identification. We explain.
                                   a
        First, Coast waited too long. The defense must know
enough about the claimed trade secret to permit the vital process
of summary judgment to proceed. A key issue in a trade secret
case is whether the trade secret is truly secret, or instead
whether it is “generally known.” (Civ. Code, § 3426.1, subd.
(d)(1).) Neither the defendant nor the court can tackle this issue
sensibly without a reasonably particular definition of the
putative trade secret. The plaintiff thus must describe its trade
secret with enough particularity to separate it “ ‘from matters of
general knowledge in the trade or of special knowledge of those
persons who are skilled in the trade, and to permit the defendant
to ascertain at least the boundaries within which the secret
lies.’ ” (Altavion, supra, 226 Cal.App.4th at pp. 43–44.) This
process “ ‘enables defendants to form complete and well-reasoned
defenses, ensuring that they need not wait until the eve of trial to
effectively defend against charges.’ ” (Id. at p. 44.)
        The defense typically will aim its summary judgment
motion at the trade secret identification the plaintiff served
under Code of Civil Procedure section 2019.210. But it destroys
the utility of the summary judgment procedure for the plaintiff to

                                11
wait until after the defense has filed its summary judgment
motion to announce there is a new secret the plaintiff would like
to define. The trial court correctly disregarded Coast’s belated
effort. (See Cohen v. Kabbalah Centre Internat., Inc. (2019) 35
Cal.App.5th 13, 18–19.)
       Coast suggested that tardy discovery by Memorial justified
Coast’s delay. In one footnote in its summary judgment
opposition brief, Coast claimed Memorial had been slow to
produce the discovery that allowed Coast to realize its medical
code secret was at issue. But neither in this court nor in the trial
court has Coast made a showing of discovery abuse. As far as is
apparent from our record, Coast filed no discovery motions, nor
did it seek informal discovery assistance from the court.
       If the defense’s unjustifiably slow discovery indeed has
created a plight for the plaintiff, the plaintiff must ask the court
to continue the summary judgment process to permit it to
reorient its trade secret case. (Cf. Hamilton v. Orange County
Sheriff’s Dept. (2017) 8 Cal.App.5th 759, 764–766 [setting forth
procedural options].)
       What the plaintiff cannot do is to wait until the defense has
loosed its arrow at the bullseye, then move the target, and finally
claim victory when the defense’s arrow misses the mark. (Cf.
Swarmify, Inc. v. Cloudflare, Inc. (N.D.Cal. May 31, 2018, No. C
17-06957 WHA) 2018 U.S. Dist. LEXIS 91333 at *6 [“ ‘Experience
has shown that it is easy to allege theft of trade secrets with
vagueness, then take discovery into the defendants’ files, and
then cleverly specify what ever happens to be there as having
been trade secrets stolen from plaintiff.’ ”].)
       In sum, Coast waited too long to suggest it had a new trade
secret it wanted to add to its case.

                                12
                                   b
       Second, Coast tells us it “requested leave” to identify a new
trade secret. This is inaccurate. Coast made no request and
made no motion. Instead, in one sentence Coast asserted in its
opposition to Memorial’s summary judgment motion that the
slow pace of discovery had given it “good cause” to amend its
trade secret identification statement.
       Coast never amended, or moved to amend, its trade secret
disclosure. (Cf. Vacco Industries, Inc. v. Van Den Berg (1992) 5
Cal.App.4th 34, 51, fn. 16 [plaintiff amended its trade secret
identification statement several times before trial]; Space Data
Corp. v. Alphabet Inc. (N.D.Cal. May 8, 2018, No. 16-cv-03260-
BLF (NC)) 2018 WL 10647160 [district court rules on challenge
to plaintiff’s fourth amended disclosure statement].) Nor did
Coast make an oral motion to amend its disclosure statement,
even though this topic arose repeatedly in oral argument.
       One may not make an important motion by adding an
indefinite sentence to the middle of a summary judgment
opposition. This tactic does not fairly notify the trial court there
is some new issue to decide. If you want a trial court to decide
something new, you must ask for a decision in clear terms
readers—including the trial judge—will recognize as a motion. If
the trial court has not mentioned your request in its tentative
ruling, then you must use oral argument to make your motion
plain. Coast never did.
       In short, the trial court was right to grant summary relief
to Memorial regarding Coast’s medical code secret. This claim is
gone from the case.
                                   2

                                 13
       Coast’s second secret concerned physician productivity.
The trial court granted summary judgment against Coast on this
claimed secret. The trial court explained its ruling in terms of
“relative value units.”
       This topic is involved, so we give readers a roadmap. First
we will explain more about relative value units to make
comprehensible our analysis of the trial court ruling. Armed with
this information, next we describe how the trial court analysis got
off track. Then we plumb Memorial’s erroneous efforts to defend
this incorrect trial court ruling.
                                   a
       To see how the trial court ruling went wrong, we explain
more about relative value units.
       The record here gives but the merest glimpse into the
specialized but well-established and elaborate world of relative
value units in the medical profession. We proceed solely on the
basis of the limited information in the record. We glean the
following.
       Relative value units comprise a quantitative method of
comparing medical procedures. Coast did not invent the relative
value unit system. On the contrary, this system has been in
widespread national use for many years.
       The relative value unit system is a numerical scale ranking
medical procedures according to difficulty and other factors. This
system apparently aims to quantify how compensable, for
instance, a heart transplant is compared to, say, a routine office
visit with a family practice doctor. The American Medical
Association has a standing committee charged with updating the
relative value unit scale from time to time. This information
seems to be crucial to medical billing and reimbursement.

                                14
       Relative value units are useful, not only for medical billing,
but also for evaluating physicians’ productivity.
       We give a hypothetical example to illustrate this point. If
Doctor A generated a large number of relative value units last
year while Doctors B, C, and D generated fewer, this disparity
might suggest A was busier or more productive than B, C, and D.
The company employing these doctors might have an obvious
interest in those data: Dr. A is in this sense contributing more to
the practice, and perhaps warrants more compensation. The
practice might decide, for instance, to work hard to keep A happy
and thereby to retain this top producer.
       This completes our brief journey into the world of relative
value units. We now turn to the trial court ruling.
                                   b
       Coast claims its secret is not the relative value unit scale or
method itself, but rather the performance of its staff in 2014 and
2015 as measured in relative value units.
       The trial court ruled against Coast for two reasons: (1)
relative value unit data are not trade secrets because relative
value units are a standard professional metric, and (2) these data
are not trade secrets because they are personal to each physician.
       Both reasons are mistaken.
       First, relative value units indeed are a standard metric.
But firms can use a standard metric to generate firm-specific
information that trade secret law will protect.
       People use standard and well-known methods to generate
individualized and confidential data all the time. The bathroom
scale is commonplace but no one knows your exact weight
today—unless you tell them. Putting your finger on your pulse
and looking at a clock is the familiar way to figure your heart

                                 15
rate, but others do not know your heart rate at this moment—
unless you reveal it. Thermometers are nothing new, but that
does not mean everyone knows your body temperatures over the
last year—or the temperatures of everyone in your workplace.
The billable hour method of measuring lawyers’ efforts is in the
public domain, but the number of hours billed last year by each
lawyer in a particular law firm is not. And so on.
       By the same principle, a medical practice’s internal records
about its staff physicians’ productivity, whether measured in
relative value units or otherwise, can be confidential and can
qualify for trade secret protection. In principle, these data can
satisfy all the statutory requirements. The information can have
value by virtue of not being publicly known. (Civ. Code, § 3426.1,
subd. (d)(1) [“Derives independent economic value, actual or
potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure
or use”].) And the firm can take reasonable measures to keep
this information secret. (See id., subd. (d)(2) [“the subject of
efforts that are reasonable under the circumstances to maintain
its secrecy”].)
       It thus was error to rule categorically that firm-specific
productivity data cannot be a trade secret simply because the
firm used a well-known method to generate the data.
       Second, it was also error to disqualify productivity data
because they are “personal” to individuals. The trial court
suggested people have a right to tell a prospective employer their
own current salary. But Coast’s case is not about that. It is
about whether Coast’s stockpile of 2014 and 2015 firm-wide
productivity records can qualify for trade secret protection. By
law, it can. (Cf. Whyte v. Schlage Lock Co. (2002) 101

                                16
Cal.App.4th 1443, 1455 [pricing, cost, and marketing information
can be trade secrets].)
                                   c
       Memorial makes six efforts to defend the mistaken trial
court ruling about Coast’s productivity secret. None succeeds.
                                    i
       First, Memorial maintains Coast’s claim about its
productivity secret fails for the same reason as its medical code
secret, again citing the California statute that required Coast to
identify its secret with reasonable particularity. This argument
is incorrect, however, because Coast’s first entry on its trade
secret was “Plaintiff’s RVU summaries.” Memorial criticizes
these words, saying Coast should have written “RVU analyses
and data.” There is little practical difference, however, between
calling something “summaries” as opposed to “analyses” or
“data”: all three quoted words are broad terms with potentially
overlapping meanings.
       If Memorial believed Coast’s filing was deficient, it should
have moved the trial court to that effect. (E.g., Alta Devices, Inc.
v. LG Electronics, Inc. (N.D.Cal. Jan. 10, 2019, No. 18-cv-00404-
LHK (VKD)) 2019 U.S. Dist. LEXIS 5048 [granting motion to
compel more particular trade secrets identification].)
       This first argument thus falls short.
                                   ii
       Second, Memorial claims Coast offered no evidence to show
its productivity data gained value from not being generally
known. This is not so. Coast offered evidence to support the
secrecy value of its physician productivity data. Memorial’s
manager retained a consultant who wrote a report that, as part of
an effort to set a fair market value for Coast, analyzed relative

                                17
value unit data. The reasonable inference is Memorial’s
consultant thought the physician productivity data were
valuable. (See Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514,
1522 [information can have economic value because its disclosure
would allow a competitor to direct efforts at especially promising
prospects] (Morlife).) This evidence created a factual dispute for
a fact finder.
       Memorial attacks this evidence as hearsay but provides us
no citation showing it raised this objection in the trial court.
Memorial thus has forfeited this objection, as well as other
evidentiary objections it belatedly raises about this document.
                                  iii
       Third, Memorial argues the physician productivity data
cannot be a trade secret because these data “are not developed by
a business.” Whether Coast developed data about the
productivity of its physicians is a fact question; some evidence
suggests it did, and Memorial seems to offer no evidence to the
contrary. This argument by Memorial is not persuasive.
       Memorial also argues physician productivity data cannot be
trade secrets because they are too “simple” and too easy to create
using well-known industry formulas. We avoid the implicit legal
question by noting Coast offered evidence this calculation method
is complicated: there was a factual dispute even if we assume
Memorial’s view of the law is correct.
                                  iv
       Fourth, Memorial claims Coast did not take adequate
measures to preserve secrecy. But Coast required its staff to sign
nondisclosure agreements. Coast protected computer files with
passwords. It limited access to sensitive materials to a need-to-
know basis. It locked office doors and file cabinets. Its employee

                               18
handbook outlined confidentiality duties. Employees had to
acknowledge this material in writing. This evidence created a
factual dispute about secrecy protection. (See Morlife, supra, 56
Cal.App.4th at pp. 1521–1523.)
                                   v
      Fifth, Memorial notes no case law says physician
productivity data can get trade secret protection. Neither party
identifies a case considering this question. But there are lots of
business secrets that have not been the subject of trade secret
cases, either because there has not been a dispute on that topic or
because the information is a new innovation. Because these data
meet the statutory criteria, at least in principle, they do indeed
qualify as trade secrets. Coast’s evidence raised disputed factual
issues on these criteria, which mandated defeat of Memorial’s
motion on this point.
                                  vi
      Sixth, Memorial says there is no evidence it
misappropriated Coast’s secrets. But Coast asserts Memorial
wrongfully violated the confidentiality agreements Coast had
with its physicians and with the evaluators Memorial hired to
appraise the fair market value of Coast. Coast’s founder testified
he had a similar confidentiality agreement directly with
Memorial, which Memorial also violated. Memorial disputes
these asserted violations. This created issues for a fact finder.
      In sum, it was wrong to grant summary judgment about
the productivity secret. We remand this claim for further
proceedings on this secret.
                                  IV
      In the second and third counts in its complaint, Coast sued
Memorial for the two types of tortious interference with economic

                                19
relations. One count was tortious interference with contract.
Another was interference with prospective economic advantage.
Via these counts, Coast sought compensation for the interference
to the economic relationships it enjoyed with doctors Vora and
Sheth, who had departed its payroll and had gone to work at
Memorial. But Vora and Sheth were both at-will employees: by
contract, they were free to leave at any time, provided they gave
proper notice. (There is no dispute on this point: their departure
notices were proper.)
       Citing the case of Della Penna v. Toyota Motor Sales,
U.S.A., Inc. (1995) 11 Cal.4th 376, 392–393 (Della Penna), the
trial court summarily disposed of both of Coast’s interference
claims, reasoning that Coast offered no proof Memorial had
engaged in wrongful conduct.
       Della Penna was a landmark case because it extensively
surveyed 150 years of case law and expressly reconstructed this
area of tort doctrine. (Della Penna, supra, 11 Cal.4th at p. 387–
391.) Very recently our Supreme Court reaffirmed and extended
this reconstruction. (Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9
Cal.5th 1130, 1141–1142 (Ixchel).)
       The trial court’s ruling was correct. We affirm it.
                                  A
       We begin with legal background about the torts of
interference with contract and interference with prospective
economic advantage.
       These two interference torts are related but distinct.
Interference with contractual relations requires a valid contract
between the plaintiff and a third party, while interference with
prospective economic advantage does not. (Ixchel, supra, 9
Cal.5th at p. 1141.)

                                20
       The roots of these torts go deep into the past, and over the
years courts have labored to define the doctrines in clear and
sensible ways. (E.g., Della Penna, supra, 11 Cal.4th at p. 378
[review granted to “reexamine” interference tort “in light of
divergent rulings from the Court of Appeal and a doctrinal
evolution among other state high courts”]; Perlman, Interference
with Contract and Other Economic Expectancies: A Clash of Tort
and Contract Doctrine (1982) 49 U.Chi. L.Rev. 61, 64 [“Despite
this long history, doctrinal confusion is pervasive, both within
and among jurisdictions.”] (hereafter Perlman).)
       The common law has shaped both torts with an eye to
preserving valid competition in the marketplace. The premise
has been that “ours is a culture firmly wedded to the social
rewards of commercial contests, [so] the law usually takes care to
draw lines of legal liability in a way that maximizes areas of
competition free of legal penalties.” (Della Penna, supra, 11
Cal.4th at p. 392.) This premise is conventional: competition can
benefit both consumers and employees. Consumers like low
prices and varied choices, while employees like the freedom to
leave one job for a better one.
       A lurking problem, however, has been that the interference
torts have an anticompetitive potential. Courts and
commentators have grappled with this anticompetitive potential
for many years. Members of the American Law Institute spoke in
1969 of the “astounding” extent to which efforts in that year to
restate the black letter of this law seemed to indict “the whole
competitive order of American industry . . . .” (Statement of
Professor Carl Auerbach at ALI Proceedings, quoted in Perlman,
supra, at p. 79, fn. 89, quoted in part in Della Penna, supra, 11
Cal.4th at p. 384.)

                                21
       The distinguished and oft-cited Professor Perlman called it
“startling” that a “doctrine of this sort is superimposed on an
economic order committed to competition.” (Perlman, supra, at p.
78.)
       The anticompetitive potential stems from the disruptive
competitive process itself. The process of competition is the
process of interference. Competition gives consumers freedom to
abandon one supplier for another offering a better deal.
Competition gives employees the power to quit one job for a
competing employer offering better opportunities.
       But when consumers or employees switch, the old firm
loses. The loser may well see the new firm as having “interfered”
with its customer or employee relationships. If the law allows
these losers to fight in court instead of in the marketplace, they
might decide to file “ ‘time consuming and expensive lawsuits.’ ”
(Ixchel, supra, 9 Cal.5th at p. 1142 [quoting Della Penna, supra,
11 Cal.4th at p. 384].)
       The prospect of time consuming and expensive lawsuits can
dull the incentive to compete with vigor. Courts thus have been
wary of lawsuits brought by a rival that has lost business or
employees and is suing based on conduct regarded by the
commercial world as both commonplace and appropriate. (Ixchel,
supra, 9 Cal.5th at p. 1142; see also id. at p. 1148 [a competitor’s
good faith offer that causes a business to withdraw from an at-
will contract could subject the competitor to costly litigation;
allowing disappointed competitors to state claims for interference
with at-will contracts too freely may expose routine and
legitimate business competition to litigation].)

                                22
       The law thus has been careful to draw liability lines to
maximize areas of competition unburdened by legal penalties.
(Ixchel, supra, 9 Cal.5th at p. 1142.)
       In light of these concerns, the California Supreme Court
has laid down a special rule limiting the interference torts in a
case like this one, which involves only at-will relationships.
Parties to at-will contracts have no legal assurance of future
economic relations. An at-will contract may be terminated, by its
terms, at the prerogative of a single party, perhaps because that
party found a better offer from a competitor. In that event, the
other party has no legal claim to the continuation of the
relationship. The contracting parties bargained for these terms,
knowing of the risk the relationship may end at any time.
(Ixchel, supra, 9 Cal.5th at p. 1148.)
       The special rule governing at-will contracts requires the
plaintiff to demonstrate the defendant interfered with its at-will
relationships “through wrongful means.” (Ixchel, supra, 9 Cal.5th
at p. 1162.)
                                   B
       Using the “wrongful means” test, the trial court correctly
ruled against Coast’s interference claims. Coast produced no
evidence Memorial used wrongful means to interfere with its at-
will relationships with Vora and Sheth.
       Preliminarily, we note Vora and Sheth are the only two
employees at issue here. Coast’s opening brief omits mention of
patients and other employees, meaning Coast has forfeited
interference claims concerning anyone besides Vora and Sheth.
       Memorial did not use wrongful conduct to hire Vora
and Sheth. Coast claims Memorial engaged in wrongful
conduct when it allegedly stole its trade secret about

                               23
physician productivity. A fact finder ultimately will
determine whether Coast’s claim has a basis in fact. But,
whatever that finding may be, this trade secret was not the
mechanism that made Vora and Sheth decide to leave
Coast.
       Vora and Sheth left Coast because they did not want
to work there anymore. These doctors saw greener
pastures working for Coast’s competitor Memorial. They
wanted out. Coast’s effort to chain them to their old jobs is
doubly anticompetitive: Coast seeks both to cut off the
mobility of its at-will employees and to block a competing
employer from giving them more attractive prospects. The
law does not permit this restraint of trade.
       California law safeguards the rights of employees to
quit the old job and to start a new one in competition with
their former employer, provided the competition is fairly
and legally conducted. (Reeves v. Hanlon (2004) 33 Cal.4th
1140, 1149 (Reeves).) By the same token, California’s
public policy also generally supports a competitor’s right to
offer more pay or better terms to another’s employee, so
long as the employee is free to leave, as an at-will employee
is. As Judge Learned Hand observed, a contrary law
“ ‘would be intolerable, both to such employers as could use
the employe[e] more effectively and to such employe[e]s as
might receive added pay. It would put an end to any kind
of competition.’ ” (Id. at p. 1151, quoting Triangle Film
Corp. v. Artcraft Pictures Corp. (2d Cir. 1918) 250 F. 981,
982.)
       Coast’s first and main citation is to the Reeves case.
This case favors Memorial, not Coast. Reeves provides an

                                24
illuminating contrast with this case. Reeves illustrates the
kind of actionable wrongful conduct that does propel at-will
employees out the door of the old job. That conduct was
different from what happened here.
       The at-will employees in Reeves were non-lawyer
staff members at an immigration law firm. Two lawyers at
that firm planned to jump ship and to take the old firm’s
clients. But the schemers’ plan was underhanded and
unethical. These lawyers bore a fiduciary duty to the firm,
but more than five months before leaving they fomented
dissatisfaction among the firm’s staff. The lawyers also
accessed password-protected databases to get contact
information for 2,200 clients and then, shortly before
resigning, they deleted these data from the firm’s
computers. They also erased the firm’s file of legal forms.
They left abruptly, without notice. Although they had been
responsible for over 500 client matters, they left no status
reports or list of matters or deadlines. Nor did they
cooperate with their old firm on a notice to clients. Instead,
they embarked on a campaign to solicit the firm’s clients,
contacting them by telephone without offering the clients a
choice of counsel. They caused the clients, many of whom
lacked fluency in English, to believe the lead lawyer at the
old firm had died or that his firm had gone out of business.
The lawyers designed this plan in part to interfere with
and disrupt plaintiffs’ relationships with their key at-will
employees. Nine employees left. Six of these went to work
for the new firm the lawyers started. (Reeves, supra, 33
Cal.4th at pp. 1145–1146 & 1154–1156.)

                                25
       In Reeves, the staff employees left because
malefactors poisoned relations in the old workplace and did
their best to scuttle the ship on their way out. The
wrongful acts made the departing employees want to leave
the sinking ship: the wrongful conduct directly caused the
employees to choose to quit.
       This case is the opposite of Reeves. The trade secret
dispute here was not why Vora and Sheth decided to opt
out of Coast. Rather, Vora and Sheth properly gave 30
days’ notice and left because they believed Memorial
offered them superior careers. This was robust competition
between Memorial and Coast, not underhanded
skullduggery.
       The trial court was right to grant Memorial summary
relief from Coast’s allegation of tortious interference.
                                   V
       The trial court correctly granted Memorial summary relief
from Coast’s fourth cause of action, which was for unfair
competition. California’s trade secret statute displaces claims for
unfair competition based on the same nucleus of facts as a trade
secrets claim. (K.C. Multimedia, Inc. v. Bank of America
Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 958
(K.C. Multimedia).)
       Coast’s unfair competition claim indeed is based on the
same nucleus of facts as its trade secret claim. Its opening
appellate brief describes its unfair competition theory in terms of
trade secrets and loss of Coast’s confidential information. This
explanation merely repeats the logic of its trade secret claim and
so must be governed exclusively by trade secret law. (See K.C.
Multimedia, supra, 171 Cal.App.4th at pp. 953–962; see generally

                                26
Lemley, The Surprising Virtues of Treating Trade Secrets As IP
Rights (2008) 61 Stan.L.Rev. 311, 344–348.)
      Coast’s sole case citation in this portion of its opening brief
is Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, which did
not consider the trade secret statute California adopted in 1984.
                                  VI
      Coast does not challenge the trial court ruling that
disposed of its punitive damages claim.
                          DISPOSITION
      We reverse the trial court’s summary judgment. We direct
the summary adjudication of all claims in respondents’ favor,
with the exception of appellant’s claim in count 1 for
misappropriation on the physician productivity secret, which
appellant called the “RVU summaries” secret. We remand this
single claim for further proceedings. In this split decision, all
sides shall bear their own costs on appeal.

                                            WILEY, J.

We concur:

             BIGELOW, P. J.

             STRATTON, J.

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