Can DTSA defendants demand 'reasonable particularity,' too?

You've been sued for trade-secret misappropriation in California federal court. The plaintiff vaguely alleges that you misappropriated its secret "software" and serves numerous requests for production. You remember that, under California law, plaintiffs must identify their trade secrets with "reasonable particularity" before obtaining discovery. Can you refuse to produce?

If the plaintiff hasn't asserted a trade-secret claim under California law, then the "reasonable particularity" requirement doesn't automatically apply and you'll need to navigate a district-court split. We review this authority and discuss how litigants might leverage it in their favor.

THE DISTRICT COURT SPLIT

When a plaintiff brings a claim under the California Uniform Trade Secrets Act (CUTSA), discovery related to its trade secrets cannot commence until it has "identif[ied] the trade secret with reasonable particularity." Cal. Civ. Proc. Code Section 2019.210. This sequencing requirement can be a powerful deterrent to plaintiffs who would otherwise allege vague trade secrets, take discovery, and then "cleverly specify what ever happens to be" in defendant's files as the stolen information. Jobscience, Inc. v. CVPartners, Inc., 13-cv-04519-WHA, 2014 WL 852477, at 5 (N.D. Cal. Feb. 28, 2014). Although the 9th Circuit has not yet decided whether Section 2019.210 applies to federal actions under the *Erie doctrine, district courts in California routinely apply it where plaintiff has asserted a CUTSA claim. Gatan, Inc. v. Nion Co., 15-cv-01862-PJH, 2018 WL 2117379, at 2 (N.D. Cal. May 8, 2018); *see also InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653, 658 n.1 (9th Cir. 2020).

Ever since the passage of the federal Defend Trade Secrets Act (DTSA) in 2016, however, plaintiffs have increasingly asserted DTSA claims in California federal court without a corresponding CUTSA claim. Unlike the California statute, the DTSA does not incorporate any discovery procedures (from state law or otherwise) that require a plaintiff to specify its trade secrets before receiving discovery. See 18 U.S.C. Section 1836; Yeiser Rsch. & Dev., LLC v. Teknor Apex Co., No. 17-cv-1290-BAS, 2019 WL 2177658, at * 4 (S.D. Cal. May 20, 2019). Thus, where a plaintiff has asserted only a claim under the DTSA, Section 2019.210 may not apply. Blockchain Innovation, LLC v. Franklin Res., Inc., No. 21-cv-08787-AMO-TSH, 2023 WL 4045234, at *1 (N.D. Cal. June 15, 2023).

Not all is lost for DTSA defendants in California though. Even where no CUTSA claim exists, district courts have split on whether to import Section 2019.210's "reasonable particularity" requirement to sequence discovery. Some courts refuse to do so because the DTSA does not have such a requirement and to require it could be interpreted as inconsistent with Rule 26 of the Federal Rules of Civil Procedure. See, e.g., Tri Tool, Inc. v. Hales, 2:22-cv-01515-DAD-CSK, 2024 WL 5202125, at 4-5 (E.D. Cal. Dec. 23, 2024); *Skye Orthobiologics, LLC v. CTM Biomedical, LLC, 2:20-cv-03444-DMG-PVC, 2021 WL 6102432, at 7-8 (C.D. Cal. Aug. 27, 2021). Other courts, exercising their broad discretion to manage discovery under Rule 16, adopt the requirement to discourage wasteful litigation tactics. *See, e.g., Quintara Biosciences, Inc. v. Ruifeng Biztech Inc., No. 20-cv-04808-WHA, 2021 WL 965349, at * 1-2 (N.D. Cal. Mar. 13, 2021). This split in authority persisted in 2024 and we expect it to continue absent intervention by the 9th Circuit. See Beijing Meishe Network Tech. Co. v. TikTok Inc., No. 23-cv-06012-SI, 2024 WL 4185639, at *3 (N.D. Cal. July 26, 2024) (collecting cases).

NAVIGATING THE SPLIT

How can a DTSA defendant (or plaintiff) navigate the split? Recent decisions identify several factors that may persuade a court to impose Section 2019.210 on a DTSA plaintiff, including: (1) whether sequencing discovery would promote effective case management as opposed to delay; (2) whether the defendant's complaints can be feasibly addressed by motion-to-compel practice; and (3) whether the plaintiff, through artfully pleading other state claims, is trying to avoid CUTSA's requirements. See Picture Shop, LLC v. Saw Inc., 2:23-cv-03075-KK-MAR, 2024 WL 2106747, at * 3 (C.D. Cal. Apr. 5, 2024); Beijing Meishe, 2024 WL 4185639, at * 4; Blockchain, 2023 WL 4045234, at * 2-3.

The third factor addresses scenarios where a plaintiff restates the elements of a CUTSA claim in other state-law claims for, e.g., breach of contract or fraud using the term "confidential information" and similar phrases. Monolithic Power Sys., Inc. v. Dong, No. 20-cv-06752-JSW-LB, 2021 WL 3847961, at * 1 (N.D. Cal. Aug. 27, 2021). Focusing on the first two factors, a DTSA defendant would do well to challenge a plaintiff's alleged trade secrets as soon as possible, including by moving to dismiss on the ground that the alleged trade secrets are insufficiently particular; serving an early interrogatory requesting the plaintiff's detailed tradesecret list; and promptly identifying deficiencies in any list that the plaintiff provides. Once the plaintiff has refused to do more and assuming the trade-secret list is still insufficiently specific, the defendant should consider filing a discovery motion (which could take several forms, including a motion to strike, compel, stay discovery, and/or for a protective order) to identify these deficiencies and request that discovery be sequenced. The earlier the defendant can make this showing, the better. After all, "discovery sequencing can work well if the parties promptly move through each sequence" and they do not delay in raising it at the outset of discovery. Blockchain, 2023 WL 4045234, at * 3; see also Picture Shop, 2024 WL 2106747, at *3.