Commure, Inc. v. Canopy Works, Inc.

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 COMMURE, INC., Case No. 24-cv-02592-NW (VKD) 9 Plaintiff, REDACTED 10 v. ORDER RE MARCH 17, 2025 DISCOVERY DISPUTE RE WORK 11 CANOPY WORKS, INC., et al., PRODUCT PROTECTION 12 Defendants. Re: Dkt. No. 147-4 13 AND RELATED COUNTERCLAIMS 14 15 Defendant and counterclaim-plaintiff Canopy Works, Inc. (“Canopy”) challenges plaintiff 16 and counterclaim-defendant Commure, Inc.’s (“Commure”) assertion of work product protection 17 for a Commure disclosed to a customer. Dkt. No. 147-4. The Court held a 18 hearing on the matter on March 25, 2025. Dkt. No. 185; see also Dkt. No. 170 (transcript). 19 For the reasons explained below, the Court concludes that Commure has waived work 20 product protection for the document at issue.1 21 I. BACKGROUND 22 Pursuant to the parties’ 2022 Reseller Agreement, Commure obtained from Canopy a non- 23 exclusive license to sell and distribute the Strongline safety solution to customers in the healthcare 24 industry. Dkt. No. 147-4 at 1; Dkt. No. 223 at 2. East Alabama Health Care Authority 25 (“EAHCA”) was one such customer. Dkt. No. 147-4 at 1, 4. Commure and EAHCA entered into 26 27 1 The Court will issue a separate order on the associated sealing motion (Dkt. No. 147). Matters 1 a subscription agreement in March 2022. Id. at 1. 2 In late 2023 Canopy advised Commure that it would not renew the reseller agreement and 3 that it intended to sell a safety solution directly to customers. Id. at 2; Dkt. No. 223 at 3. Shortly 4 thereafter, Commure announced that it would sell a competing safety solution. Id. at 2; Dkt. No. 5 223 at 3. In January 2024, Canopy terminated the reseller agreement, citing Commure’s alleged 6 failure to make timely payments under the agreement. Dkt. No. 147-4 at 2; Dkt. No. 223 at 4. 7 On February 27, 2024, EAHCA notified Commure 8 which was due to expire on February 29, 2024, and that 9 . Dkt. No. 147-4 at 2, 4-5; Dkt. No. 147-3 at 3. After receiving 10 this notification, Tanay Tandon, Commure’s CEO, 11 12 13 14 Dkt. No. 147-2. At the end of 15 his cover email to the EAHCA representatives, Mr. Tandon states: 16 17 Id. at 1. The record does not reflect 18 whether or how EAHCA responded to this statement. 19 On April 30, 2024, Commure sued Canopy asserting several claims under federal and state 20 law. Dkt. No. 1. In November 2024, during discovery in this action, Commure subpoenaed 21 documents from EAHCA. Dkt. No. 147-4 at 2, 6. EAHCA’s responsive document production 22 included the February 27, 2024 email. Commure promptly provided 23 EAHCA’s documents to Canopy. Id. at 2-3. Neither EAHCA nor Commure redacted any of these 24 documents, designated them confidential, or provided a privilege log indicating the assertion of a 25 privilege or protection. Id. at 2, 3. 26 II. LEGAL STANDARD 27 Rule 26(b)(3) shields from discovery documents that fall within the scope of the attorney 1 work product doctrine protects from discovery materials that are prepared by or for a party or its 2 representative in anticipation of litigation. Id. The doctrine provides qualified protection against 3 discovery of the legal strategies and mental impressions of a party’s counsel. Hickman v. Taylor, 4 329 U.S. 495, 508-10 (1947); Upjohn Co. v. United States, 449 U.S. 383, 390-91 (1981). It does 5 not protect facts from disclosure unless disclosure of those facts would inherently reveal an 6 attorney’s strategies or mental impressions. See, e.g., O’Toole v. City of Antioch, No. 11-cv- 7 01502-PJH (MEJ), 2015 WL 1848134, at *3 (N.D. Cal. Apr. 14, 2015); Hamilton v. RadioShack 8 Corp., No. 11-cv-00888 LB, 2012 WL 2327191, at *4-5 (N.D. Cal. June 18, 2012). As the party 9 asserting the attorney work product doctrine, Commure bears the burden of establishing that the 10 protection applies. See, e.g., United States v. Ruehle, 583 F.3d 600, 607-608 (9th Cir. 2009); 11 Insight Global, LLC v. Beacon Hill Staffing Grp., LLC, No. 17-cv-00309-BLF (VKD), 2018 WL 12 6573081, at *2 (N.D. Cal. Dec. 13, 2018). 13 The work product protection is not absolute and may be waived. United States v. Nobles, 14 422 U.S. 225, 239 (1975). Rule 502(b) of the Federal Rules of Evidence applies here and provides 15 in relevant part: 16 [T]he disclosure [of a communication or information covered by attorney-client privilege or work-product protection] does not 17 operate as a waiver in a federal or state proceeding if: 18 (1) the disclosure is inadvertent; 19 (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and 20 (3) the holder promptly took reasonable steps to rectify the error, 21 including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B). 22 23 Fed. R. Evid. 502(b). 24 A voluntary disclosure of work product waives the protection where such disclosure is 25 made to an adversary in litigation or where the disclosure is made in a manner that substantially 26 increases the opportunities for potential adversaries to obtain the work product. United States v. 27 Sanmina Corp., 968 F.3d 1107, 1121 (9th Cir. 2020) (citing 8 Charles Alan Wright & Arthur R. 1 Japan, 249 F.R.D. 575, 578, 580 (N.D. Cal. 2007). Work product protection may also be waived 2 by putting the protected work product at issue, such as by asserting claims that the opposing party 3 cannot adequately dispute unless it has access to that protected work product. See Bittaker v. 4 Woodford, 331 F.3d 715, 719 (9th Cir. 2003); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 5 1162-63 (9th Cir. 1992). 6 Even if the protection is not waived, work product may be discoverable if the materials 7 meet the requirements of Rule 26(b)(1) and if the party seeking production shows a “substantial 8 need for the materials to prepare its case and cannot, without undue hardship, obtain their 9 substantial equivalent by other means.” Fed. R. Civ. P. 26(b)(3)(A). Upon such a showing, a 10 court must nevertheless “protect against disclosure of the mental impressions, conclusions, 11 opinions, or legal theories of a party’s attorney or other representative concerning the litigation.” 12 Fed. R. Civ. P. 26(b)(3)(B). 13 III. DISCUSSION 14 The parties agree that the prepared by Commure’s General Counsel 15 qualifies for work product protection.2 See Dkt. No. 147-4 at 3, 5. Canopy does not argue that it 16 has a substantial need for the communication disclosing that under Rule 26(b)(3)(A). 17 The sole question is whether, by disclosing the to EAHCA, Commure voluntarily 18 waived work product protection. 19 Commure asserts that the was provided at 20 Id. at 5. It contends that the 21 was provided pursuant to a “robust confidentiality clause” in the EAHCA subscription 22 agreement, or that at the very least, Commure had a reasonable expectation that EAHCA would 23 keep the confidential. Id. at 4, 5, 6. In addition, Commure argues that it and EAHCA 24 had business and legal interests in common and that the was shared in 25 furtherance of those interests. Id. at 5. 26 Canopy responds that whatever work product protection may have attached to Mr. Brian’s 27 1 was destroyed when Mr. Tandon forwarded the to EAHCA. Id. at 3. 2 Canopy argues that the relationship between Commure and EAHCA was an ordinary arms-length 3 commercial relationship, and that Commure disclosed the to EAHCA solely to 4 Id. at 2, 3. Canopy argues that 5 EAHCA had no legal obligation to maintain the in confidence. Id. at 3. 6 The Court agrees with Canopy that Commure waived work product protection for the 7 when Commure forwarded the to EAHCA. First, Commure’s 8 disclosure of the to EAHCA was intentional, and not inadvertent. The 9 February 27, 2024 email exchanges attached to the parties’ discovery dispute letter reflect that 10 11 12 Second, Commure did not take reasonable steps to protect its General Counsel’s work 13 product. Commure’s argument that EAHCA 14 —a 15 “common adversary”—is simply not supported by the record. There is no evidence suggesting 16 that EAHCA had any legal interest in common with Commure, and EAHCA had already 17 communicated let alone a 18 common business interest.3 While EAHCA 19 nothing in the record suggested that EAHCA Moreover, while the 20 confidentiality provision in the subscription agreement may have been “robust,” Commure has not 21 shown that the provision applied to the shared with EAHCA.4 Indeed, Mr. 22 Tandon’s cover email suggests that Commure did not expect the agreement to cover the sharing of 23 24 3 As discussed during the hearing, Commure need not establish a “common interest” with 25 EAHCA; it need only establish that the disclosure to EAHCA was made in a manner that did not substantially increase the opportunity for potentially adversaries to obtain the work product. See 26 Nidec Corp., 249 F.R.D. at 580. 27 4 Commure did not include the confidentiality provision in its portion of the discovery dispute 1 There is no 2 evidence that EAHCA agreed to do so. See Finjan, Inc. v. SonicWall, Inc., No. 17-cv-04467-BLF 3 (VKD), 2020 WL 4192285, at *5 (N.D. Cal. July 21, 2020) (questioning whether “the mere habit 4 of Cisco’s board observer and Finjan’s inconsistent confidentiality marking, without more, are 5 sufficient to support Finjan’s position that it disclosed the disputed materials to Cisco in a manner 6 that reasonably ensured they would be kept confidential and would not be shared with an 7 adversary”); see also Lamartina v. VMware, Inc., No. 20-cv-02182-EJD (VKD), 2024 WL 8 3049450, at *3 (N.D. Cal. June 17, 2024) (“VMware concedes that it waived the attorney-client 9 privilege when . . . emails containing privileged communications about VMware’s backlog 10 disclosure were forwarded to VMware’s outside auditor at PwC.”). 11 Third, Commure took no steps to have EAHCA return or destroy the 12 or even to confirm it would treat the as confidential, even after EAHCA 13 Commure appears to 14 have taken no other steps to protect the contents of its General Counsel’s work product from 15 disclosure. 16 In short, Commure disclosed its General Counsel’s to a third party— 17 —in a 18 manner likely to substantially increase the opportunities for potential adversaries to obtain that 19 work product. For this reason, the Court concludes that Commure has waived work product 20 protection for the disclosed to EAHCA. That waiver extends to the February 21 27, 2024 email exchange that includes the shared with EAHCA, but not 22 beyond. 23 IV. CONCLUSION 24 Commure must produce the document attached as Exhibit A to the discovery dispute letter 25 /// 26 /// 27 /// 1 to Canopy without redactions by May 13, 2025. 2 IT IS SO ORDERED. 3 || Dated: April 29, 2025 4 5 Virginia K. DeMarchi 6 United States Magistrate Judge 4 8 9 10 11 12 13 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28