[00:00:00] Speaker 02:
Go ahead and state your name, who you represent, and how much time you want to reserve for rebuttal.

[00:00:07] Speaker 00:
Jay James Lee, for Quintara Biosciences Appellant.

[00:00:12] Speaker 00:
I reserve five minutes.

[00:00:14] Speaker 02:
Okay.

[00:00:15] Speaker 02:
Well, watch the clock.

[00:00:16] Speaker 02:
It's up to you to keep that time.

[00:00:22] Speaker 00:
So, in this case, Quintara did not get a fair trial because the opposing council

[00:00:30] Speaker 00:
Reshma Kamas, she had this outlandish style of trial rarely seen in this country.

[00:00:39] Speaker 00:
And the major damages she did to the trial was through her opening statement based on a set of slides.

[00:00:47] Speaker 00:
The slides were spread upon Quintera on the first day of trial without being disclosed beforehand as required.

[00:00:58] Speaker 00:
And the contents of the slides

[00:01:00] Speaker 00:
were really highly prejudicial to Quintera and to his two key witnesses, Dr. Richard Shen and Dr. Su Zhao.

[00:01:14] Speaker 01:
Didn't your client agree in some form to the slides?

[00:01:20] Speaker 00:
No, we never seen the slides until the slide was shown to the jury.

[00:01:28] Speaker 00:
Before the trial started, there was a post board.

[00:01:37] Speaker 00:
Post board has one line, has Bonnie and Clyde.

[00:01:46] Speaker 00:
And so we agreed to let her use that one post board.

[00:01:52] Speaker 00:
But then in the

[00:01:54] Speaker 00:
When she started her opening, project on the screen, and we realized that she had a whole set of slides never disclosed to us, we object that the district court allowed it.

[00:02:07] Speaker 01:
Mr. Lee, I wonder if I could take you to the discovery and the Rule 12 issues.

[00:02:18] Speaker 01:
What distinguishes this case, in your view, from IntelliClear, where we seem to read that the, I understand you're complaining that

[00:02:27] Speaker 01:
the district court heard in applying a cutsa discovery standard in a case that involved only federal trade secret claims.

[00:02:40] Speaker 01:
IntelliClear, we seem to suggest that at least in a case with both of those claims that the district court was correct in looking at the particularity of the trade secret claims, why doesn't IntelliClear control here?

[00:02:55] Speaker 00:
Because this case, we only have a federal claim.

[00:02:58] Speaker 00:
There's no state court trade secret claim.

[00:03:02] Speaker 00:
And so the federal law should govern here.

[00:03:05] Speaker 00:
And also, there's issue of the purpose of the federal rules to bring about the uniformity across the nation.

[00:03:15] Speaker 00:
If, let's say, there's no dispute, the seven trade secret claims met the pleading standard.

[00:03:23] Speaker 00:
But yet the judge dismissed it for lack of particularity based on 2019-2010.

[00:03:33] Speaker 00:
So if this case was filed in a different state, has no equivalent of 2019-2010, it would not be dismissed because they met the pleading standard.

[00:03:43] Speaker 00:
That's undisputed.

[00:03:49] Speaker 00:
If there is a state law case, of course, the judge should look at the state law 2019-2010, but there's no such case.

[00:04:00] Speaker 01:
Even in a state law case under eerie, if the state law is procedural and or conflicts with the federal rules, again, the state law would have to give way even in a diversity case, right?

[00:04:14] Speaker 00:
You're absolutely right, and this is not even a diversity case.

[00:04:17] Speaker 00:
This is a federal question case.

[00:04:18] Speaker 01:
Do you understand in looking through the orders, I think the District Court references both Rule 12 and Rule 16.

[00:04:28] Speaker 01:
assuming that it was not supported under Rule 12 for the moment, doesn't a district court have inherent authority to manage pretrial proceedings under Rule 16, and wasn't the district court authorized to draw on California's expertise in these things to impose this?

[00:04:49] Speaker 00:
Yes, but not to the extent of altering the pleading standard.

[00:04:54] Speaker 00:
And that's a problem here.

[00:04:57] Speaker 00:
and there's no state spirit, our pleadings met the standard, but then he dismissed it.

[00:05:04] Speaker 00:
So that's like allowing the district court to circumvent the pleading standard by the name of managing discovery.

[00:05:12] Speaker 01:
Well, what if it were framed as, what if it were framed simply as managing discovery?

[00:05:16] Speaker 01:
It said, well, trade secrets for obvious reasons are, discovery in trade secrets cases is a sensitive matter.

[00:05:25] Speaker 01:
bring in and do a protective order, let's sequence discovery so we don't have any phishing expeditions.

[00:05:33] Speaker 01:
Would the district court have been able to invoke something that, and I think this is what the district court said it was doing, something like the California standard as inspiration for its own case management of discovery in this case to address those concerns of trade secret discovery?

[00:05:52] Speaker 00:
Yes, Your Honor.

[00:05:55] Speaker 00:
We look at an order not by its label, by its substance.

[00:06:00] Speaker 00:
Here, the order is not about sequencing, it's not about time, place of discovery.

[00:06:07] Speaker 00:
It's outright denied discovery and denied a place in the case.

[00:06:15] Speaker 00:
all the seven claims.

[00:06:16] Speaker 00:
So that's different, very different from managing discovery, managing the time, place, sequence.

[00:06:24] Speaker 00:
Here is outright deny, and that's basically, it's like dismissing the suit.

[00:06:32] Speaker 01:
Okay.

[00:06:34] Speaker 01:
Let's assume your case reached summary judgment on those seven claims.

[00:06:39] Speaker 01:
Under IntelliClear, would the district court have been correct then on the merits inquiry of asking about the reasonable particularity?

[00:06:48] Speaker 01:
In other words, you can see that you'd have an obligation at the summary judgment stage in order to establish a genuine disputed material fact to say that these are reasonably particular trade secret claims under the IntelliClear standard?

[00:07:03] Speaker 00:
Yes, that's a diversity case, Your Honor.

[00:07:09] Speaker 01:
Well, but I think as I understood it, it denied the Rule 56 motion as to both the state and the federal claims, right?

[00:07:19] Speaker 01:
It involved both federal and state trade secretaries.

[00:07:21] Speaker 00:
Correct, yeah.

[00:07:22] Speaker 00:
So even in that case, the outcome is still denied, and whether apply

[00:07:29] Speaker 00:
2019-2010 or not, the outcome is the same in that case.

[00:07:34] Speaker 00:
And so that case does not mandate any affirmation of this decision.

[00:07:43] Speaker 00:
The case really is quite different from the current case.

[00:07:47] Speaker 00:
The current case, the court

[00:07:50] Speaker 00:
dismissed seven trade secret claims, despite the fact there's no dispute.

[00:07:57] Speaker 00:
All seven claims met the pleading standard.

[00:08:00] Speaker 00:
So this is like allowing the court to circumvent the pleading standard by the name of a managing discovery.

[00:08:10] Speaker 00:
That should not be allowed.

[00:08:11] Speaker 00:
And to allow that is to defeat the purpose of a federal rule of bringing about a uniformity across the nation.

[00:08:24] Speaker 00:
So can I go back to the other issue, the new trial issue?

[00:08:32] Speaker 03:
Yeah, going back to that issue, assuming that you have prejudice, didn't the judge cure the prejudice when he told the jury in effect?

[00:08:40] Speaker 03:
And I'm assuming there was an instruction, similar instruction, when he told the jury that nothing that they're hearing in opening statements is evidence.

[00:08:50] Speaker 00:
Yes.

[00:08:51] Speaker 00:
But that instruction alone cannot cure the prejudice.

[00:08:58] Speaker 00:
was brought up on our case.

[00:09:01] Speaker 03:
Wasn't there some agreement as to the use of some documents before trial?

[00:09:07] Speaker 03:
It could be used in opening and closing statements?

[00:09:11] Speaker 00:
Yeah, like I just stated, there was a poster board.

[00:09:15] Speaker 00:
And so that we agreed, you could use a post board.

[00:09:19] Speaker 00:
But then when she started presenting her opening,

[00:09:24] Speaker 00:
and this whole new set of slides never disclosed to us.

[00:09:28] Speaker 00:
We objected and the judge denied the objection.

[00:09:33] Speaker 00:
So the bottom line, there's no agreement to use the set of slides.

[00:09:41] Speaker 00:
The slides compared

[00:09:45] Speaker 00:
our clients, two major witnesses to Bonnie and Clyde, and it was a graphical depictions.

[00:09:54] Speaker 00:
And those slides, I think you're reprobably damaging the credibility.

[00:10:01] Speaker 03:
Would it have been okay for counsel to have shown that slide to the jury in closing argument?

[00:10:09] Speaker 00:
Even in closing, some are not okay.

[00:10:11] Speaker 00:
For example, she presented her own

[00:10:15] Speaker 00:
online research, many pages of that, presented, masqueraded those as facts to the jury.

[00:10:22] Speaker 00:
Those are not allowed even for closing, Your Honor.

[00:10:24] Speaker 00:
It's pure argument, inappropriate argument outside the bounds of propriety and a good face.

[00:10:34] Speaker 00:
And also, this is not about whether her words are evidence.

[00:10:39] Speaker 00:
This is about her inflamed the jury.

[00:10:42] Speaker 00:
She also threatened the jury.

[00:10:45] Speaker 00:
of further danger from Dr. Shen and Dr. Zhao as modern-day Bonnie and Clyde.

[00:10:54] Speaker 00:
And she also presented a series of legal arguments in the format of a closing argument.

[00:11:05] Speaker 00:
First, she instructs the jury of the law.

[00:11:09] Speaker 00:
Then she then do the application of the law.

[00:11:15] Speaker 00:
that part probably okay in the closing, but certainly not okay in the opening.

[00:11:23] Speaker 00:
And normally the judge gave the jury instruction at the end of the trial, but she took upon herself to instruct the jury and then use those self-made law to apply the facts.

[00:11:40] Speaker 00:
So those

[00:11:42] Speaker 00:
series of legal arguments, series of damage in our case, and poison the jury's mind before the evidential process even started.

[00:11:56] Speaker 00:
That's a problem, Your Honor.

[00:11:58] Speaker 02:
Well, Counsel, it looks like we're down into the time you wanted to reserve for rebuttal.

[00:12:04] Speaker 02:
Would you like to reserve your time?

[00:12:05] Speaker 02:
Make sure my colleagues don't have any additional questions at this time.

[00:12:08] Speaker 00:
Thank you.

[00:12:15] Speaker 04:
Good morning, Your Honor.

[00:12:16] Speaker 04:
May it please the court?

[00:12:17] Speaker 04:
I am Nisipora.

[00:12:18] Speaker 04:
I'll be left with the appellee, Your Honor.

[00:12:20] Speaker 04:
So from the get-go, Your Honor, I'd like to address the issue regarding the prejudicial effect of the Bonnie and Clyde reference.

[00:12:30] Speaker 04:
And I think, based on the record, there is some form of a stipulation, Your Honor,

[00:12:36] Speaker 04:
And if I may, by the way, Your Honor, the opening argument was done on day one, and they only filed a motion for mistrial on day two.

[00:12:46] Speaker 04:
They should have filed, they should have complained about the prejudicial effect as soon as after the conclusion of the opening argument was on day one.

[00:12:55] Speaker 04:
In fact, the judge went on to, sorry, the district court judge went on to comment that,

[00:13:02] Speaker 04:
You should also address why you waited so long, why you didn't ask for a curative instruction.

[00:13:08] Speaker 04:
So this is day two when they filed a motion for mistrial and then the district court went on to say that.

[00:13:16] Speaker 04:
So I think that was.

[00:13:18] Speaker 04:
this is a code, direct code.

[00:13:20] Speaker 04:
So I think that was, that set of problems got swept away in a stipulation.

[00:13:25] Speaker 04:
So there was a stipulation by parties to allow the slides of both Bonnie and Clyde by the previous counsel of this case, Your Honor.

[00:13:35] Speaker 04:
Other than that, Your Honor, I think there's also no prejudicial effect as Bonnie and Clyde reference.

[00:13:41] Speaker 04:
As to the issue of the

[00:13:45] Speaker 04:
Um, motion to strike the trade secrets, your honor.

[00:13:49] Speaker 04:
So I believe there is no great abuse of discretion in the part of the district court.

[00:13:54] Speaker 04:
Um, they, they properly applied the state substantive law pursuant to the eerie doctrine.

[00:13:59] Speaker 01:
And which element of, Mr. Avila, of Rule 12F do you think supported the strike of the trade secret claims?

[00:14:13] Speaker 01:
Was it an insufficient defense, redundant, immaterial, impertinent, or scandalous?

[00:14:18] Speaker 04:
I believe it's irrelevant, Your Honor.

[00:14:21] Speaker 01:
That's not one of the grounds.

[00:14:26] Speaker 04:
Redundant, Your Honor, scandalous?

[00:14:29] Speaker 04:
Okay, and by the way, let me point out that the unanimous jury verdict ruled that they have no ownership at all to any trade secret.

[00:14:41] Speaker 04:
So the first element of trade secret, which is ownership of trade secret, they already failed in meeting the threshold requirement.

[00:14:49] Speaker 04:
So if they failed in that threshold requirement of ownership, what right can appellant have in complaining whether or not the judge committed

[00:14:59] Speaker 04:
grave abuse of discretion in managing discovery.

[00:15:01] Speaker 01:
Did they ever get discovery on the seven claims?

[00:15:04] Speaker 01:
I mean, this was struck before.

[00:15:05] Speaker 01:
Usually we wouldn't take a jury verdict on some claims and believe it resolves other claims that never got to discovery.

[00:15:13] Speaker 04:
Correct, Your Honor.

[00:15:14] Speaker 04:
There were only two trade secrets that were raised on trial, Your Honor.

[00:15:19] Speaker 04:
The other trade secrets were stricken off the records by the trial court judge.

[00:15:24] Speaker 04:
But it is noteworthy that

[00:15:28] Speaker 04:
the jury ruled that they never own any trade secret at all, Your Honor.

[00:15:34] Speaker 04:
And the jury has reasonable evidence to support that conclusion based on the jury instruction, Your Honor.

[00:15:42] Speaker 04:
So I would argue that that goes for all the other trade secret as well, because they are tightly knit with each other, Your Honor.

[00:15:51] Speaker 01:
They're basically interlapping the trade secret seven to nine or nine other trade secrets They're interlapping with the with the one that is untried which is the customer profile database and well some of the trade secrets seem to be more technological biological about processes scientific processes It seems like it might be a stretch to suggest that the jury verdict with respect to the

[00:16:18] Speaker 01:
customer information would necessitate or cure any error made earlier on with respect to a lack of being allowed to proceed on these scientific processes.

[00:16:34] Speaker 04:
So I think, Your Honor, that the district did not commit grave abuse of discretion in striking out those trade secrets.

[00:16:41] Speaker 04:
The underlying principle

[00:16:44] Speaker 04:
of that is basically is to avoid the filing of frivolous trade secrets.

[00:16:50] Speaker 04:
It is to avoid a situation.

[00:16:51] Speaker 01:
That's a principle that's in state law, right?

[00:16:54] Speaker 01:
Correct, Your Honor.

[00:16:55] Speaker 04:
The reasonable particularity requirement, Your Honor, please.

[00:16:58] Speaker 01:
Do you contend that the district court had authority to apply state procedural law in a federal subject matter jurisdiction case?

[00:17:09] Speaker 04:
Absolutely, Your Honor.

[00:17:10] Speaker 04:
I think that's what the trial court did.

[00:17:13] Speaker 04:
In fact, it's part of the discovery, the discretion of the court to manage discovery, the sequencing of the discovery, Your Honor.

[00:17:22] Speaker 04:
So I think the court

[00:17:25] Speaker 04:
sort of mentioned the shifting stands, shifting stands theory, wherein the plaintiff should not be allowed to retroactively amend the complaint to conform to whatever is yielded during the discovery, Your Honor.

[00:17:40] Speaker 04:
So that is the evil that is trying to be avoided.

[00:17:43] Speaker 01:
I think we have cases in other areas, such as the California anti-SLAP rule, where we've rejected the application of any state

[00:17:52] Speaker 01:
pleading rules, in that case a bar on amendment to even state claims.

[00:18:00] Speaker 01:
So I guess I'm not sure what's the handle here to bring in a law that is not at issue in a procedural posture.

[00:18:11] Speaker 01:
It's not even an eerie question because this is in diversity jurisdiction.

[00:18:15] Speaker 01:
On what authority does the district court have to apply state procedural law?

[00:18:20] Speaker 04:
So I think, Your Honor, it is correct that there are some district court cases which does not support our position, but there are also other district court cases which allow the striking out of trade complaints.

[00:18:33] Speaker 01:
In peer federal trade secret claim cases?

[00:18:37] Speaker 04:
I believe so, Your Honor.

[00:18:38] Speaker 04:
I believe so, Your Honor, there are.

[00:18:40] Speaker 04:
Any of those?

[00:18:41] Speaker 04:
I believe the OpenAI case, Your Honor.

[00:18:46] Speaker 04:
So I think that that also involves the federal, the Defend Trade Secrets Act, Your Honor, the Open AI case, Your Honor.

[00:18:54] Speaker 04:
So I believe that the district court has broad powers, Your Honor, to strike out trade secrets which do not conform with the regional particularity requirement.

[00:19:07] Speaker 04:
And again, this is a broad discretion, clothed with a trial court, Your Honor.

[00:19:12] Speaker 04:
And for you to, for the other party to ascribe grave abuse of discretion,

[00:19:17] Speaker 04:
I don't think they could meet that standard of grave abuse of discretion in these.

[00:19:20] Speaker 03:
I'm sorry, Judge.

[00:19:22] Speaker 03:
So what happened here is, I understand it, utilizing Rule 12F, a motion to strike, utilizing Rule 16, which is, we all know what Rule 16 is, I deal with it every day.

[00:19:36] Speaker 03:
The judge dismissed seven out of nine of the trade secret claims before there's any discovery, before anything has happened in the case whatsoever, correct?

[00:19:49] Speaker 03:
That's what he did.

[00:19:51] Speaker 03:
I think there was initial discovery.

[00:19:53] Speaker 03:
It's just that the trade disclosure- Well, you've got rule 16 disclosures, so you've got some disclosures.

[00:20:00] Speaker 03:
There were disclosures, yes, Your Honor.

[00:20:03] Speaker 03:
That doesn't strike you as being a little extreme.

[00:20:07] Speaker 04:
I don't think so, Your Honor.

[00:20:09] Speaker 04:
So I think that the district court correctly applied the reason of particular to requirement of Section 2019-210, Your Honor.

[00:20:19] Speaker 04:
And this is supported by several district court decisions.

[00:20:23] Speaker 04:
The Swarmify, Your Honor, the Swarmify case that

[00:20:27] Speaker 03:
if I may just quote, Your Honor, that consistent with this approach, judges in our district basically... This is a Northern District of California thing that they do where they utilize the state law to sort of like screen these trade secrets claims.

[00:20:46] Speaker 03:
Is that what's going on here?

[00:20:49] Speaker 03:
At the get-go before there's even been any action at all in the case.

[00:20:54] Speaker 04:
So I believe there are district court cases which support that case, Your Honor.

[00:21:00] Speaker 04:
My position is, if the district court supports or anchors his decision on those other cases, I don't think there is grave abuse of discretion on that part, Your Honor.

[00:21:10] Speaker 01:
You can see, Swarmify is a pure cut-set case.

[00:21:14] Speaker 01:
It's a diversity jurisdiction case.

[00:21:15] Speaker 01:
Yes, Your Honor.

[00:21:17] Speaker 01:
And even if it's a diversity jurisdiction case, we'd have to ask ourselves whether it's consistent with Erie to apply the procedural law.

[00:21:22] Speaker 01:
But this isn't a diversity case, so how could we rely on

[00:21:26] Speaker 01:
cases that involve cuts of claims when the plaintiffs here chose not to bring a cuts of claim.

[00:21:33] Speaker 04:
So I think this supports the theory your honor of the broad powers of the district court in managing discovery and and and

[00:21:41] Speaker 04:
if they take inspiration from the California substantive law, then they are not at all in error in doing that, Your Honor.

[00:21:47] Speaker 01:
Did the district court, so there's one thing in terms of managing discovery, there's another thing, as Judge Christensen has pointed out, in dismissing claims.

[00:21:57] Speaker 01:
Did the district court make any findings that we usually require for dismissal under either Rule 16 or Rule 37 before dismissing these claims?

[00:22:09] Speaker 04:
So I think the ruling of the district court is it failed the reasonable particularity requirement, Your Honor.

[00:22:14] Speaker 01:
Which is a state law test, not our test for what it takes to dismiss a case for discovery.

[00:22:20] Speaker 04:
It invoked section 2019, Your Honor, of the California... And your view is that that's sufficient to dismiss federal... Yes, for deficient disclosures, Your Honor.

[00:22:30] Speaker 04:
Yes, correct, Your Honor.

[00:22:31] Speaker 04:
Okay.

[00:22:33] Speaker 04:
Thank you.

[00:22:34] Speaker 02:
If you have no further argument, we'll allow your counsel on the other side to use this rebuttal time.

[00:22:40] Speaker 02:
Thank you, Your Honor.

[00:22:41] Speaker 02:
Thank you.

[00:22:46] Speaker 00:
I want to answer some questions on what's not answered.

[00:22:51] Speaker 00:
First, about the timing, so why we did not raise it right there.

[00:22:59] Speaker 00:
right on that day from this trial.

[00:23:02] Speaker 00:
And we were asking, because we never seen that before, we don't have a copy of the slides, we're asking the opposing counsel to give us a copy of a slide.

[00:23:12] Speaker 00:
She refused.

[00:23:14] Speaker 00:
And so next day, she still refused, and we made the motion.

[00:23:20] Speaker 00:
And the judge then ordered her to give us a copy.

[00:23:24] Speaker 00:
So that's the reason for that timing.

[00:23:29] Speaker 00:
Your Honor asked which elements of Rule 12 applies.

[00:23:34] Speaker 00:
At the beginning, the judge invited the other side to file a motion to strike, basically under Rule 12F.

[00:23:45] Speaker 00:
But we presented a case called a whittle stone of Ninth Circuit case that specifically forbid such practice.

[00:23:56] Speaker 00:
So that's why the judge, their opposition, which is in the extract of the record, their opposition, their motion explicitly relied on Rule 12F, which is not allowed.

[00:24:14] Speaker 00:
And so the judge looked at our opposition, probably realized what he initially wanted to do was not allowed.

[00:24:23] Speaker 00:
That's why he couched the order.

[00:24:25] Speaker 00:
in discovery management.

[00:24:29] Speaker 00:
That's the background for that.

[00:24:37] Speaker 00:
where's the authority to apply this discovery rule of California to federal question cases?

[00:24:46] Speaker 00:
And I would say there's no such authority.

[00:24:48] Speaker 00:
And particularly, the rule itself, I believe the rule one made it very clear for all federal question questions to claim this has to be governed by

[00:25:03] Speaker 00:
by federal rules of civil procedure for the uniformity of the application.

[00:25:10] Speaker 00:
And about whether there's a discovery, you're absolutely correct.

[00:25:15] Speaker 00:
There was no discovery.

[00:25:17] Speaker 00:
There was an initial disclosure, and the judge stopped the discovery based on 2019-2010.

[00:25:25] Speaker 00:
And then the judge, then we amended our disclosure

[00:25:31] Speaker 00:
then judge invited that side to file a motion to strike.

[00:25:34] Speaker 00:
So there was no discovery on the seven claims.

[00:25:38] Speaker 00:
Thank you, Your Honor.

[00:25:39] Speaker 02:
All right.

[00:25:39] Speaker 02:
Thank you, counsel.

[00:25:40] Speaker 02:
Thank you to both sides.

[00:25:41] Speaker 02:
Any other questions?

[00:25:42] Speaker 02:
No.

[00:25:42] Speaker 02:
All right.

[00:25:43] Speaker 02:
Thank you to both sides.

[00:25:44] Speaker 02:
And with that, this case is submitted and will be