BusinessMan28
Junior Member
What is the name of your state (only U.S. law)? California
Complicated to explain, but here is a try – let me explain a little background on our situation and then lead up to my question:
I own an S corporation that has been in business for many years - online retail. A very good friend of mine was also in exactly the same line of business as I am and is the owner of his own corporation. In 2002, I propositioned my friend to go into a joint business with me (the same online retail that we were both already in) and we formed a 3rd S corporation in which we were both 50 / 50 shareholders. From 2002 to 2008, I had my own business, which I was 100% owner, he had his own company, which he was 100% owner and then we had the joint corporation, which we were 50 / 50 owners – all of which were in exactly the same line of business. Many things happened in 2007 and the joint corporation was wound down and dissolved without the consent of my friend…this happened for many reason, the most prominent of which was that the joint company was losing money and I was the one covering the losses.
All that being said, my friend (well really no longer my friend now) decided to sue me for breach of contract. He is now subpoenaing records not only related to the joint company that we had but also records related to my personal corporation, which he never had any part of and there was never any co-mingling between the companies…everything was 100% separate. I have absolutely no objection in giving him any and all information related to the joint corporation, but I do not want him granted access to information related to my personal corporation.
He is a direct competitor of mine and I have many advertising techniques, which I believe give me a competitive advantage over others in my industry (including him). Therefore, here are my questions:
1. Is there a specific law out there that would stop him from subpoenaing our records since he is in direct competition and would undoubtedly benefit him from seeing our business strategies?
2. Are there specific cases that have experienced this type of situation and possible prevailed in the attempt to stop a competitor from obtaining documents they could directly benefit from?
3. If there is not a specific law or case that we can use to quash his attempt to get our business records, then how effective is a protective order in this type of situation?
4. If the plaintiff is a direct competitor of ours and our only alternative is a protective order, can the protective order limit the information they are requesting so that it is only available to a 3rd party independent party?
5. If we can limit the information to a 3rd party independent party, then can we demand that only information related to the case be released to the plaintiff (and his attorney)?
I just have to believe that there is a law out there that would limit the scope when it comes to companies that are in direct competition. If the plaintiff were granted access to our business advertising techniques, it would undoubtedly result in loosing our competitive advantage to his company.
For the record, the advertising techniques that we use have nothing to do with the case at hand…but I believe that the plaintiff is trying to intentionally access our records to take advantage of our advertising strategies for his own company.
Also, we do have an attorney representing us and I have asked these same questions of him…he indicates that the only option is a protective order that would try to limit the information to just the attorney’s, but that it all depends on what the judge decides and he has no idea what way it will go. Our attorney does believe that the plaintiff is unreasonable and overly broad in his subpoenas…but says it can go any number of ways depending on the judge’s mode!
As far as records go, I have nothing at all to hide (except my advertising strategies)…this entire lawsuit is just a shake down as I did not do anything wrong. Apparently, anyone in America can sue for any reason and now I am in the position of defending myself against a case that has no basis.
Any help with this specific point would be greatly appreciated.
Thanks in advance!What is the name of your state (only U.S. law)?
Complicated to explain, but here is a try – let me explain a little background on our situation and then lead up to my question:
I own an S corporation that has been in business for many years - online retail. A very good friend of mine was also in exactly the same line of business as I am and is the owner of his own corporation. In 2002, I propositioned my friend to go into a joint business with me (the same online retail that we were both already in) and we formed a 3rd S corporation in which we were both 50 / 50 shareholders. From 2002 to 2008, I had my own business, which I was 100% owner, he had his own company, which he was 100% owner and then we had the joint corporation, which we were 50 / 50 owners – all of which were in exactly the same line of business. Many things happened in 2007 and the joint corporation was wound down and dissolved without the consent of my friend…this happened for many reason, the most prominent of which was that the joint company was losing money and I was the one covering the losses.
All that being said, my friend (well really no longer my friend now) decided to sue me for breach of contract. He is now subpoenaing records not only related to the joint company that we had but also records related to my personal corporation, which he never had any part of and there was never any co-mingling between the companies…everything was 100% separate. I have absolutely no objection in giving him any and all information related to the joint corporation, but I do not want him granted access to information related to my personal corporation.
He is a direct competitor of mine and I have many advertising techniques, which I believe give me a competitive advantage over others in my industry (including him). Therefore, here are my questions:
1. Is there a specific law out there that would stop him from subpoenaing our records since he is in direct competition and would undoubtedly benefit him from seeing our business strategies?
2. Are there specific cases that have experienced this type of situation and possible prevailed in the attempt to stop a competitor from obtaining documents they could directly benefit from?
3. If there is not a specific law or case that we can use to quash his attempt to get our business records, then how effective is a protective order in this type of situation?
4. If the plaintiff is a direct competitor of ours and our only alternative is a protective order, can the protective order limit the information they are requesting so that it is only available to a 3rd party independent party?
5. If we can limit the information to a 3rd party independent party, then can we demand that only information related to the case be released to the plaintiff (and his attorney)?
I just have to believe that there is a law out there that would limit the scope when it comes to companies that are in direct competition. If the plaintiff were granted access to our business advertising techniques, it would undoubtedly result in loosing our competitive advantage to his company.
For the record, the advertising techniques that we use have nothing to do with the case at hand…but I believe that the plaintiff is trying to intentionally access our records to take advantage of our advertising strategies for his own company.
Also, we do have an attorney representing us and I have asked these same questions of him…he indicates that the only option is a protective order that would try to limit the information to just the attorney’s, but that it all depends on what the judge decides and he has no idea what way it will go. Our attorney does believe that the plaintiff is unreasonable and overly broad in his subpoenas…but says it can go any number of ways depending on the judge’s mode!
As far as records go, I have nothing at all to hide (except my advertising strategies)…this entire lawsuit is just a shake down as I did not do anything wrong. Apparently, anyone in America can sue for any reason and now I am in the position of defending myself against a case that has no basis.
Any help with this specific point would be greatly appreciated.
Thanks in advance!What is the name of your state (only U.S. law)?